Strømme Foundation Annual Report 2009 by Strømmestiftelsen

STR ØMME FOUNDATION ANNUAL REPOR T 2009

Contents

Chairman and Secretary Generals report International Section Outreach 2009 West Africa - 2009 East Africa - 2009 Asia – 2009 South America – 2009 Where we work Communication and Fundraising Report from the Strømme Foundation Board Activity account Balance sheet Cash flow Accounting principles Notes Auditors report Images from the world Thank you Board and council members

3 4 5 6-7 8-9 10-11 12-13 14-15 16-17 18-20 21 22-23 24 25-26 27-31 32 33 34 35

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2009 – Chairman and - Secretary Generals report

2009 was challenging in implementing its plans which demanded an approach that would eventually enable people to take control of their lives The year 2009 marked the launch of Strømme Foundation’s five-year (2009-2013) strategic plan. Strømme Foundation’s operational areas have been reduced from 17 to 12 countries. Similarly, as can be seen from this report, SF’s focus was on its four thematic goals and six intervention lines during the current five-year plan, as opposed to the previous long-term programme. The year 2009 also witnessed launching of Strømme Microfinance AS with a separate structure, and its own Board of Directors. However, SMF AS and Strømme Foundation (SF) worked together to ensure synergy between microfinance and education.

An ongoing dialogue in 2009 between SF and the three ministries of education in Mali, Burkina Faso and Niger in West Africa, to establish a Regional Secretariat proved positive. The purpose of the proposed Secretariat is to anchor and scale up Speed School’s strategic interventions in the region as a joint responsibility of the three countries. A formal agreement is expected to be signed in Kristiansand by the three ministers of education in June 2010.

Another highlight of the year 2009 was launching of Operation Day’s Work (Operasjon Dagsverk) five-year programme in Bangladesh that would uphold the dignity of over 100,000 adolescent girls over the next five years.

The financial result for 2009 tells us that Strømme Foundation has a solid financial basis. A one year process involving all staff made it possible for SF to launch a new Communication Platform, as well as a new brand profile in December 2009. Our new “Pink Book” now defines the most important cornerstones for culture and brand building in Strømme Foundation. The platform will help us become more conscious about who we are, where we want to go and how to get there. This platform also forms the basis of the internal and the external communication which is expressed through Strømme Foundation’s communication strategy. Strømme Foundation would like to place on record its deep appreciation and thanks to all the stakeholders globally for their continued support and guidance, without which SF could not play a meaningful role in promoting life with dignity among the poor and marginalized.

The year 2008 was an exceptionally productive year by way of preparing the ground for planning for the future. 2009 was challenging in implementing its plans which demanded an approach that would eventually enable people to take control of their lives. And now we are going for the future! The four regions continued to reach out to the people in need through our partner organisations. In doing so, the challenge was to ensure that our partners functioned in conformity with SF’s new strategic plan that focuses on specific thematic goals and intervention lines. Consequently, the regional offices helped the partners with capacity and competence building during the year. The thrust of the regions was on qualitative accomplishment of planned results, as can be seen from the highlights described in this report. It is, however, pertinent to point out in the introduction an important achievement in West Africa, with regard to the Speed School strategy.

During 2009 more than half a million people (a great majority of women) directly benefited from SF’s interventions. Particular focus, as in the past was on girls and women.

Øyvind Aadland Secretary General

Geir Magnus Nyborg Chairman of the Board

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International Section 2009

During the five year period, it is estimated that almost 100,000 adolescent girls in Bangladesh will be empowered through the education programme The Program Department and the Microfinance (MF) Department constitute the International Section of Strømme Foundation. As the first year of our 2009-2013 Master Plan period, and the New Framework Agreement (2009 – 2013) with Norad, with clear focus on education and microfinance, 2009 saw the introduction of the six intervention lines to guide Strømme Foundation’s development work. These are: strengthening basic education (formal and non-formal), promotion of community managed microfinance (CMMF), provision of holistic pro-poor financial and non-financial services, community empowerment for democratisation, empowering adolescents on their rights, and culture for value formation. As a follow up to the Norad 2008 Organizational Review of Strømme Foundation, the International Section has been reorganised to facilitate a closer and more systematic interaction between the Program and Microfinance departments. In addition, each department’s mandate has been clarified in order to strengthen the role of the International Section in coordinating the operations in the regions and to more firmly anchor responsibility for the development budget in the International Section. In 2009 the Program Department experienced a number of changes. First, a new Program Director was recruited, replacing the previous one who is going for retirement. Second, the new structure of the Department – which consolidates the functions of the Education and Monitoring and Evaluation Advisors, was approved. Also approved was the introduction of two new functions into the Department; an Institutional Fundraiser and a Documentation and Dissemination Advisor. We also started a process of recruiting additional staff in order to strengthen the Program Department. 2009 was the first year in the five year cooperation with Operation Day’s Work. This cooperation centres on the Shonglap programme in Bangladesh. During the five year period, it is estimated that almost 100,000 adolescent girls in Bangladesh will be empowered through the education programme, which provides girls with life skills, literacy training, and training in income generating activities.

In all four regions, strategies for the implementation of the Master Plan were developed and, more significantly, partner consultation workshops were conducted to anchor the Master Plan to the partners. In the first quarter of 2009, Strømme Foundation structured its ownership and coordination of all microfinance activities through the fully owned company Strømme Microfinance AS (SMF AS). SMF AS serves as a holding company for its subsidiaries in Sri Lanka (Strømme Microfinance Asia Guarantee Limited) and East Africa (Strømme Microfinance East Africa Ltd). It also has a branch in Bangladesh and supervises Strømme Foundations MF activities in West Africa and East Africa. In addition to being the sole owner and supervisor of all microfinance activities, SMF AS coordinates all of Strømme Foundations microfinance activities and serves as the liaison office between its subsidiaries, the funding partners and other stakeholders in the Global North. SMF AS is working according to the development policy and vision of Strømme Foundation. The involvement in, and approach to, microfinance can be categorized as conventional institutionalised microfinance and Community Managed Microfinance (CMMF). Conventional MF is used as the name for partnerships with MFIs and other financial institutions. In such partnerships, SMF AS provides both financial and non-financial support. Community Managed Microfinance is based on the principle of participant ownership and the loan fund is funded by the savings of the participants themselves. When involved in CMMF, SMF AS’s role is limited to providing non-financial services, especially training. The operation in 2009 was according to plan, with further development and expansions of the programme portfolio and development of the internal governance structure. Financially 2009 was influenced by the global financial crisis, causing a significant currency loss in SMF AS. With this exception of the currency loss, the annual accounts show an efficient organisation.

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Outreach 2009

Region MF Basic Country Fin Services CMMF Education Total Other Grand F M F M F M F M F M Total East Africa Uganda 17300 16800 8400 2600 8000 8700 2000 2700 66500 35700 30800 Kenya 19400 7800 100 100 3200 11600 42200 22700 19500 Tanzania 4900 2900 800 800 5600 4300 0 0 19300 11300 8000 Sudan 2900 1600 6400 9200 0 0 20100 9300 10800 Rwanda 37 13 4700 80 14700 14500 0 0 34030 19437 14593 SUB-TOTAL 41637 27513 16800 5080 34800 36800 5200 14300 182130 98437 83693 West Africa Mali 75 600 41400 5600 5800 10200 9200 72875 57275 15600 Burkina Faso 400 77 3300 1600 1800 0 0 7177 5300 1877 Niger 800 900 0 0 1700 800 900 SUB-TOTAL 475 677 44700 8000 8500 10200 9200 81752 63375 18377 Asia Sri Lanka 35900 11100 6400 4800 17600 5200 81000 59900 21100 Bangladesh 134100 1600 12100 12200 17700 0 177700 163900 13800 Burma Cambodia 36 3 39 36 3 SUB-TOTAL 170036 12703 18500 17000 35300 5200 258739 223836 34903 South America Bolivia 1500 1000 10500 7200 20200 12000 8200 Peru 1000 100 8300 5500 8200 5000 28100 17500 10600 SUB-TOTAL 1000 100 9800 6500 18700 12200 48300 29500 18800 Global ACT NOW 7 17 24 7 17 Total 213148 40993 61500 5080 71107 68817 69400 40900 570945 415155 155790

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West Africa 2009

Because of local demand, SFWA is developing a second speed school curriculum in Niger. This is called Speed School 2 and is targeting girls and boys from 13 to 15 years. Also in 2009 Speed School and Community Managed Microfinance (Self-Help Women’s Savings Groups) has been the main focus of our work in the West Africa region. In total Strømme Foundation here has, trough our interventions, reached more than 80 000 beneficiaries in Mali, Niger and Burkina Faso. Trough implementing the five year strategic Master plan, we have focused more on the synergy between the education and microfinance sectors. To meet the demands from the new strategy we have had a workshop with partners on result based management (RBM) and adult education for our team in West Africa. Two workshops on Speed School are also done with partners and representatives from local governments to define a common frame for Speed School in the three countries we are working in the region. In February 2009 the tree ministers of education in Mali, Burkina Faso and Niger visited Norway. They had meetings with the Secretary General, program director of Stromme Foundation and regional director, for talks on establishing a sub regional secretariat of Speed School. These recommendations were gathered by Strømme Foundation head office to elaborate the proposal for the secretariat. Last year our microfinance intervention got a new partner in Timbuktu in the north of Mali. This partner is already involved in Speed School and Community Managed Microfinance, (CMMF). One partner in Burkina Faso and two partners in Niger were also included in our CMMF in the region in 2009. Because of local demand, SFWA is developing a second speed school curriculum in Niger. This is called Speed School 2 and is targeting girls and boys from 13 to 15 years. The idea is to give

teenagers a chance to complete six years curriculum in just two years. As an experiment we have also developed a new curriculum for adult education called active literacy. This is a pilot project done by two partners. So far this project is done with 200 students, enrolled in 20 literacy centers. The concept is important for the sustainability of self helps groups and train mainly women in citizenship, good governance, and decentralization. The classes will be in Bambara and French. Out of more than 16 000 children who started speed school in 2009, more than 14 000 completed and close to 12 000 of them have transferred to formal school. Last year also more than 44 000 women from close to 2000 Community Managed Microfinance groups have also been reached. Strømme Foundations MIMETA (our company for Culture and Development), signed a five year agreement with Ministry of Culture in February 2009. The agreement was signed with the minister of Culture in the presence of Strømme Foundations Secretary General and the program director. The partnership aims to support cultural action, inheritance, culture industries through organized structures and networks in culture. Three projects, two projects in literature, and one project that support the opening of a first time ever Summer School on Culture in Bamako. With an international partner we have signed an agreement to work on microfinance with artists. As this is a pilot project we have introduced and selected tree such partners giving microfinance loan to artists. IN 2009 our region has recruited four new employees, a Program Officer (lady), Administrative and Financial Officer, a coordinator for our work in Burkina Faso and Niger and an Assistant bilingual Secretary.

CMMF - a life changer Fanta Diakité, a mother of eight, got a loan of 100,000 CFA (153 EURO) after she became a member of the Saving for Change (CMMF) group in her village. She bought a wagon and a donkey and hired a young man to work with the wagon. Fanta is now bringing

goods to and from markets for persons that needs her service. She also bought some land and is now building her own house. Her other business has changed from selling petty spices to selling vegetables and other foods. Now she is earning some 4000 CFA (6 EURO) a week. Madame Diakité is grateful to the CMMF group because it has helped her not only to gain entrepreneur skills but also improved her savings capacity which is essential as a buffer against crises!

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East Africa 2009

More than 70 classrooms were built/renovated and furnished. We have built houses for teachers and two rural computer centres are set up. In 2009 Strømme Foundation East Africa has reached out to more than 180.000 people in Uganda, Kenya, Tanzania, Rwanda and Sudan.

This has led to a better learning environment in poor communities. Enrollment attained was more than 91%, an average increase of more than 14.3%.

By the end of the year our support to Rwanda and Northern Upper Nile Region in Sudan was closed. In 2009 UNDP provided a grant of USD 1.4 million for interventions in community managed microfinance, Functional Adult Literacy and Accelerated learning which necessitated an office base in Bor in southern Sudan.

To enable young school-dropouts to get the chance to complete primary education, more than 10 alternative basic education centres were started in Sudan with 541 enrolled and four centres in Rwanda with 738 pupils enrolled. In 2009 we also trained 62 functional adult education facilitators and we started 22 training centres in Sudan with close to 1100 participants.

With our participatory approach working through 44 partners and aiming at building quality education for marginalised groups in poor/hard to reach communities our partners have redefined and developed their five year Strategic Plans and annual plans for 2010 in line with the SF Master plan. Training on Results Based Management was held for education partners to improve program design, implementation and monitoring for results. This aided partners in conducting baseline surveys, developing monitoring and evaluation plans, and are now a yardstick against which program progress will be measured. In 2009 we trained more tan 1000 teachers in Sudan and Rwanda, to change from Arabic and French respectively to English pattern teaching. Close to 1700 community members, members in School Management Committee, and members in the Parent Teacher Association (PTA) members were trained in school management, good governance, and local resource mobilisation. This has lead to strengthened governance, better school management systems, enhanced community participation and responsibility positively impacting school performance. Strømme Foundation in East Africa worked in 2009 with 136 primary schools and 10 early childhood centres. More than 70 classrooms were built/renovated and furnished. We have built houses for teachers and two rural computer centres are set up.

Microfinance interventions are implemented through Strømme Microfinance East Africa Limited (SMF EA Ltd), a shareholding company that provides professional wholesale lending services targeting the poor. In our region we have revised our business plan 2009 – 2013. Through the Community Managed Microfinance, a pro-poor intervention using the self help group approach, we reached more than 21.000 people, 70% of them were women. Besides savings and loans, clients were equipped with entrepreneurship skills and some groups also engaged in community development projects. The interventions has registered savings mobilised by a group hitherto considered too poor to save, increase in household incomes, assets and support to children’s education. In the wholesale loan intervention, the outstanding portfolio grew by 54% to USD 9.5 million. At the end of 2009 Strømme Microfinance EA Ltd (SMF EA Ltd) partners were directly reaching about 45.000 microfinance clients. Pursuant to our objective to ensure that the social mission of Microfinance is attained, SMF EA Ltd organised Social Performance Management training and 4 SPM ratings of 4 MFI’s were facilitated. Capacity building was provided to enable partners improve their systems and processes.

Achamnow and her brother Orphaned by HIV/AIDS at 11 and 13, Otelu and his sister Achamnow live with their grandmother. They earned US$ 0.70 a day by tending people’s gardens. In 2005 Vision Terudo (VT) started supporting them and provided US$ 65, -

to buy groundnuts to plant in their own garden, 2 oxen and a plough. The harvest was 3 bags of groundnuts. They sold 2 of them, and kept one for their own use. With the money from the sales they bought 2 goats which multiplied to 11. They sold 2 and used the money to buy new clothes and buy school needs. The children’s health and nutrition has improved since they can now have 3 meals a day. A house was also built for Otelu and Acham at USD50.

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Asia 2009

Effects of Shonglap resulted in adolescents opposing early marriages, improving sanitation, and advocating for their rights. Many have rejoined formal education under “Back to school” program During 2009, Strømme Foundation Asia reached close to 250.000 beneficiaries in Bangladesh, Sri Lanka, Myanmar, East Timor and Cambodia. Our focus on strengthening the civil society by empowering thousands of excluded communities in a sustainable manner was carried out by our partner organisations with active community participation. Creating an enabling environment for the continuation of this process, capacity building of both partners as well as Community Based Organizations was a priority in Strømme Foundation Asia’s agenda in 2009. Strømme Foundation microfinance interventions in Bangladesh benefited around 135,000 people in 2009. Under the Shonglap programme close to 18.000 adolescents girls were empowered. Effects of Shonglap resulted in adolescents opposing early marriages, improving sanitation, and advocating for their rights. Many have rejoined formal education under “Back to school” program. Some small income generation activities supported by the Shonglap program have made them self-reliant. In Education, close to 35.500 children were admitted in formal and non-formal education, and staff, teachers and Shonglap animators were trained and mobilized. Quality Education component in Primary Schools covered 15,700 children with an achievement of 89% regular attendance while dropout rate has been reduced to 5.6% whereas national dropout rate is 32% and in coastal areas it is as high as 70%. In Sri Lanka we continued our efforts in reaching those who

were not captured in conventional development work. We have focused on empowering people socially and economically, and worked to strengthen civil society to increase people’s participation in advocating issues of poverty, gender, peace and environment. In 2009, more than 300 Community Based Organizations (CBOs) were formed with more than 20.000 members from poverty stricken communities. These organizations are transforming into protective safety-nets providing mutual support, resist external threats and claim their rights for durable changes in their communities. To serve opportunities of life skill development for children and youth we have organized children and youth clubs with more than 15.000 members. Vocational training has given hope for youth members with most of them upon completion has already engaged in self-employment. School Development Societies plays a vital advocacy role in making parents and other stakeholders responsible for quality education. The joint implementation of microcredit and primary healthcare activities was a resounding success in Myanmar. SF’s interventions in East Timor were closed down in 2009. Our program in 2009 witnessed the transformation of 14 community initiatives taking shape into fully fledged CBO’s benefiting over 8000 people. Last but not least Asia will continue to focus on quality, consolidated programmes ensuring constructive change, promoting the economic, social and cultural development.

DREAM – changed her life Shriyani, a mother to eight children, was living a life of illicit drug trafficking. She was jailed many times. She battled to feed her children who never completed their education. Her community cornered and mocked her. Strømme Foundations DREAM program removed her gradually from illegal

work through counselling and showing her the opportunity to an alternative livelihood. Shriyani was given sheets, wire nets and cement to build her henpen, and 10 birds to start chicken rearing. She was also guided to start paddy farming. Today Shriyani sells 200 eggs a week at 15-20 Rupees each. She has bought a bike and now she saves for emergencies apart from the regular savings. Shriyani now dreams of a future for her two youngest children, to educate them and give them a good life.

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South America 2009

It has been especially encouraging to see the positive results achieved by the interventions focusing on integral development of the early childhood in the rural communities of Anchonga, and the second to help teenage mothers face the early motherhood. In 2009 Strømme Foundations work in South America has concentrated on three main target groups; children at risk and young people, and women and adults living in vulnerable and marginal urban areas. Total investment in the region amounted to 9.9 million NOK of which 45% was invested in Bolivia, funding a total of six educational projects, 55% were destined to fund 11 projects implemented in Peru. The financial situation in 2009 obliged us to behave in a rather conservative manner and The South American region had to leave aside the hoped expansion planned for the period in certain areas. By the end of 2009, Strømme Foundation, South America had seventeen current projects implemented by its 12 local partner organizations. Among these, nine are Peruvian and three are Bolivian. 15 of the 17 projects are educational, while just two of them are fighting poverty with the microfinance tools! With an overall goal of contributing to the eradication of poverty and reducing the high levels of inequality existing in the region, we have organized our work into four thematic objectives: i) guaranteeing quality education for vulnerable children; ii) strengthening the capacity of authorities and leaders in order to increase good governance and citizenship; iii) preventing violence towards adolescents and women in part by teaching protective behaviours; and iv) increasing the income of poor persons, especially women. In 2009 our region was able to benefit about 48.000 participants. Our vocation to serve the vulnerable children at risk is shown in the fact that they represent 65% of our total participants followed by children´s parents (16%), vulnerable adults

(13%), local authorities and leaders (3.36%), young people (1.72%), and teachers (1.16%). Following our development practices, we started to assess three of our projects: i) the Resourceful Child, ii) the Teenage Mothers Centre, and iii) Children and community changing risk situations for all boys and girls in Huaycan. It has been especially encouraging to see the positive results achieved by the interventions focusing on integral development of the early childhood in the rural communities of Anchonga, and the second to help teenage mothers face early motherhood. Under the Act Now youth exchange program the region also opted for exchanges between Norway and the region. In 2009 we have favored the voluntary service of eight young Norwegians, who came to Peru and Bolivia for a period of seven months. Likewise, the region could send two youngsters, one from Iquitos and one from Huaycan (Lima) to Norway, where they went to learn about the Norwegian culture and share their with their peers from Norway and from the other regions where SF intervenes. By using this approach, we believe we are contributing to achieve a better understanding between our cultures, while we generate stronger two-way bridges between our peoples. Our partners were able to meet three times during the year in order to attend capacity building events organized by the Regional Office. The Regional Office team reached the end of the year ready for a break! Tired, but with a great degree of satisfaction for having been able to accomplish what it proposed to within the given framework.

Rural Warrior Felicitas Achaui, a mother to six, became an orphan at the age of ten when her parents died. She grew up with her uncle. Felicitas got married. Some years later her husband, who was a farmer, had an accident and could not work so Felicitas had to take care for her family.

At a community meeting in her village she heard about MIDE, a microfinance organization working in the area. In spite of some women who did not want her to take loan, she managed to borrow 100 soles (36 USD). She invested in 4 hens and later 6 more. Felicitas has now managed to increase her family’s income. And as she goes to work her husband stays at home cooking. And both of them are happy because she has progressed.

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Foto: Elisabeth Middttveit, Act Now

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Support to projects including regional office cost

EduNo.of No.of cation partners projects Global programs 3 772 6 6

Education Mali Burkina Faso Niger West Africa

MicroNo.of No.of finance partners projects

9 110 4 718 17 24 2 276 1 074 6 8 1 508 780 2 4 12 894 6 572 25 36

MALI

BURKINA FASO

PERU Education

MicroNo.of No.of finance partners projects

BOLIVIA

Peru 5 048 276 9 10 Bolivia 4 168 0 3 6 South America 9 216 276 12 16

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EduMicroNo.of No.of cation finance partners projects 2009 2009 2009 2009 Total 63 352 21 952 111 135 Grand total - support to projects in 2009

85 304

EduMicroNo.of No.of cation finance partners projects Bangladesh 9 720 338 8 10 Sri Lanka 5 547 4 528 14 14 East Timor 308 0 0 1 Myanmar 249 77 1 1 India 157 0 1 1 Asia 15 981 4 943 24 27

BANGLADESH

NIGER

MYANMAR

SUDAN

SRI LANKA UGANDA

KENYA TANZANIA

Education

Microfinance

No.of No.of partners projects

Uganda 3 590 3 752 19 20 Tanzania 1 555 1 554 6 7 Sudan 11 688 735 11 13 Kenya 3 249 3 671 3 5 Rwanda 1 407 449 5 5 East Africa 21 489 10 161 44 50 Remarks 1. The Microfinance (MF) figures include only fresh funding from SF during the year, and not operations or loan disbursements in our MF companies/entities. 2. Regional Office cost has been distributed onto the countries in each region. 3. The numbers of partners and projects do not include those which are solely related to the MF companies/entities. Figures in 1000 NOK w w w . s t r o m m e . o r g \ S T R Ø M M E F O U N D AT I O N A N N UA L R E P O R T 2 0 0 9

Communication and Fundraising

Strømme Foundation is honored by the extraordinary generosity of our donors and partners, who provide financial resources for our programs around the world. Despite the 2009 global financial crisis, donations from private individuals, organisations and corporates in Norway reached an all time high in 2009 with a total of 62 million NOK. We are naturally very pleased with this result, and would like to thank all our donors, partners and staff for making this possible. Based on The Strømme Foundation’s Master Plan for 2009-2013, the Communication Department took the initiative to re-edit our Communication Platform from 2005. After initiating a process involving all staff at the Head Office and in all four regions, we launched the new Communication Platform, as well as a new brand profile in December 2009. Our new “Pink Book” now defines the most important cornerstones for culture and brand building in Strømme Foundation. The platform will help us become more conscious about who we are, where we want to go and how to get there. This platform also constitutes the basis of the internal and the external communication which is expressed through Strømme Foundation’s communication strategy. Individual Donors In 2009 the number of private individual donors was reduced by 5% from 23,006 to 2,922. A tough market situation, as well as a variety of strong child sponsorship programs offered by other organization, makes it challenging to attract new regular donors (Friend at Heart and Fattigdomsbekjemper). Still, the average amount per donor increased during 2009. Restructuring of the Individual Donor Group, followed by an increase of fundraising activities in 2010, will hopefully turn this negative trend. Social Media has in 2009 been a focus area, and as of December 2009, Strømme Foundation had more than 10.200 members on Facebook. There have also been weekly activities on Twitter and blogs.

A new initiative for fundraising among high net worth individuals in the US and UK together with Geneva Global did however open many new doors, and formed a basis for further activities in 2010. Former Act-Now students (Strømme Foundation’s youth exchange program) launched RE: Act, a youth organization which defines itself as Strømme Foundations youth organization. In 2009 Strømme Foundation did not take any income from lotteries, slot machines or from telephone sales. We want and believe in supporters with engagement and involvement in the work of eradicating poverty. PR & Media Strømme Foundation works with the media to try to get attention on development issues and South / North information, and to raise awareness and focus on our intervention lines. We are also focused on how we can promote our work and development issues in general through the media. In 2009 our media section could register at least 380 stories in magazines and newspapers. We had a few chronicles in some nationwide newspapers. One of the chronicles managed to get high attention as it challenged our politicians, criticizing them for not putting development issues and the poor world on the political agenda before the election of the new national assembly. In 2009 we also managed to draw some attention in media to education in West Africa. This happened especially when the tree ministers of education in Mali, Burkina Faso and Niger visited Norway in the winter of 2009.

Major Donors, schools and corporations We are happy to announce that despite financial challenges in the corporate sector, all our business partners have loyally chosen to stay with us in 2009. Still we did not reach our target goals for major gifts.

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5,3 4,0

10,7 Public Sector Grants

58,0

37,7

Individual Donations Fixed Term Donations Events Schools and artists Contributions from other organizations Corporate Sector

12,1 Figures in millions of NOK 2009

Figures & facts Private donors (total) 21.922 Fixed-term donors 16.160 -Friend at Heart’s 12.005 -Brobygger 3.441 -Fatigdomsbekjemper 488 Single donations 5.762 Outreach Norwegian children & youth 14.525 Number of business partners 43 Outreach business partner employees 20.461 Micro Shares (mikroaksjonærer) 33 Number of partner schools 29 Youth engaged in SKRIK campaigns 136 Visitors: web-page www.strommestiftelsen.no 36 500 Visitors: web-shop www.levebrod.no 12 459 Facebook members 10.200 HTS magazine subscribers 26 500 Number of news articles in media (newspapers, magazines, web) 380

A children´s festival.

A school fundraising event.

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A Business Partner event.

Report from the Strømme Foundation Board for 2009

Strømme Foundation (SF) is committed to empowering people to overcome the root causes of poverty. SF’s identity is based on Christian values, emanating from the life and teachings of Jesus Christ. SF plays a catalytic role in empowering the marginalized sections of society to have access to basic needs, resources, and decision-making bodies and thus aim at promoting a just society. The Board The Board has had four meetings in 2009 and dealt with 35 issues. Trond Randøy (who had been a substitute), Inge Lønning and Anna Minj were elected to replace Egil Gjesteland, Gunvor Andresen and Joanna Ilboudo. In addition Karianne Toppe Angelskår was elected as a substitute and the employees re-elected Olaf Gundersen and elected Anja Husebø as the new substitute to replace Jon Østby. New Framework Agreement with NORAD In early 2009 SF signed a new five year framework agreement with NORAD that amounts to a total of 40.7 m NoK per annum including 1.7 m NoK earmarked specifically to Mali; the remaining 39 m NoK is core funding. This is very good news for SF and the Board is very satisfied with continuing good relations with NORAD. Main results obtained The most important results for Strømme Foundation are those that measure our success in achieving our main goal of helping the poor. 2009 was the first year of implementation of the Master Plan, where we have focused on measuring the outcome of our work in a better way than we have been able to historically. This means involvement and inclusion of the partners and the process of getting these measures in place is ongoing. However; the Board is satisfied on the evidence available that the organisation is achieving its aims of reaching the poor more effectively. In East Africa we wound up our partnerships in Rwanda. Having focused on enhancing operational and financial sustainability with the partners and on helping them to mobilise local resources, the Board is satisfied with a successful exit from this country. SF also discontinued operations in the Upper Nile region of Sudan. This was primarily due to the worsening security situation, but is also consistent with our strategy of focusing geographically. In West Africa, the signing of an agreement with the Mali government regarding SF-sponsored Speed Schools was very important, as there are now formal agreements in place with all three West African countries in which we operate, the other two being Niger and Burkina Faso. There are many exciting possibilities with these agreements, as a secretariat of the three

governments’ education ministers works more closely with SF, and we have the opportunity to develop as a resource centre for wider implementation of speed schools. In Asia we discontinued operations in East Timor; handing over the local partner to Tear Fund New Zealand, who are our partners in the Integral Alliance network. We also further investigated the options of re-entering Nepal, which is also a part of the Master Plan. In South America the involvement in the ‘Sicor project’ in Bolivia was among the highlights in 2009. The project aims at providing key personal and social skills for life to the marginalized and socially excluded boys, girls and youth in Bolivia through education and music. Microfinance and Culture subsidiaries In February 2009 the General Assembly of Strømme Microfinance AS (SMF AS) elected the Board of Strømme Foundation (SF) to also be the Board of the revitalized SMF AS. For technical reasons, the assets could not be transferred as of 1st Jan 2009, and so the transfer was made effective 1st April 2009. This is reflected in the consolidated accounts, where there is a result and balance for microfinance within SF just for the first quarter, where after all microfinance operations appear in the consolidated figures only. SF also has a controlling Interest (65%) in Mimeta AS, the first Norwegian organization specializing in the sector of culture and development, and this is also shown in the consolidated accounts. Restructure at Head Office During 2009 in response to the challenges of implementing the organizations five year Master Plan (2009 to 2013) the Head Office was restructured. The purpose was to ensure that the Master Plan could be co-ordinated effectively and specifically strengthen the Program Department. We also re-organised the Communications department into three separate teams: Media/PR; Individual Donors; and Major Donors & Corporations. An important element in the restructure plan has been to improve co-ordination between departments to enable the office to reach its potential, especially in fundraising for major gifts. Financial Headlines Consolidated Accounts There was a consolidated loss of -6.7 mNoK in 2009 compared to a surplus of 46 mNoK in 2008. The big loss is due entirely to exchange rate losses as the microfinance portfolio is denominated in foreign currency and the value depreciated significantly against the Norwegian kroner during 2009. The actual operating result in microfinance is positive and in line with budget.

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For the first time in 2009 the results for Mimeta AS are included in the consolidated accounts; there is relatively little turnover and a -1.1mNoK loss on consolidation as most of Mimeta’s income comes from Strømme Foundation in 2009. Total equity decreased from 174.7 mNoK in 2008 to 161.5mNoK in 2009. The cash flow from operational activities is satisfactory; total liquid funds at the yearend were 46.5 mNoK and there is satisfactory liquidity in the new year. Strømme Foundation The total income in 2009 was 128.6 m NoK kroner compared to 129.9 m NoK in 2008. Public Sector income increased from 54.5 m NoK in 2008 to 58 m NoK in 2009 - the difference being mainly the additional Norad funding plus UNDP and USAID funds received for Sudan. Private Donations have remained relatively stable; 53.4m NoK in 2008 up to 53.7m NoK in 2009 and income from the Corporate Sector has decreased from 6.4m NoK in 2008 to 5.3m in 2009. Contribution from other organizations increased from 10.2m NoK in 2008 to 10.7m NoK in 2009. There is a greater share of Norwegian income in this figure compared to income from outside Norway, less from Geneva Global (USA) and this additional Norwegian support secured from Operasjon Dagsverk. Financial support to projects remained stable in 2009 at 103.9 m NoK, the same as the figure for 2008. The result for the year after change in earmarked capital was a surplus of 8.5 m NoK compared to a 8.6 million kroner surplus in 2008 before microfinance operations are included. Including the result from microfinance, the result for the year was a loss of -6.0 mNoK compared to a surplus of 37.7 mNoK in 2008. Change in the basis of activity accounting As 2009 was the first year of the new Master Plan, the Board took the opportunity to review the basis of cost allocation between purpose, fundraising and administration and adjustments have been made. It was discovered that with reference to the updated Norwegian Accounting Standard Board’s guidelines, SF have been overstating administration costs and they are therefore reduced in 2009 as more support costs have been allocated to activities. The key figures for SF as a percentage of total costs in 2009 are; Administration 5.0% (7.1 in 2008), Fundraising 10.6% (11.6%) and Purpose 84.4 % (81.8%). There was a decrease in fundraising costs in 2009 compared to 2008, mainly due to high expense in 2008 for the re-launch of “Friends at Heart”, SFs main product for individual giving. The Board and Secretary General feel it is correct to present the annual report under the going concern assumption. The organization is in a good economic and financial position with its footing in the Norwegian fundraising market and its good

relations with NORAD and the Ministry of Foreign Affairs. Working environment and Staff The working environment in the SF is considered to be good. The cooperation with the employee’s unions has been constructive and has contributed positively to the development work. Absence due to illness at the head office was approximately 6.3 % (5 % in 2008) of the total working time. This figure includes an unusually high level of long term sickness in 2009 that was not work related. The organization has a company doctor agreement. There were no serious accidents at work resulting in material damages or personal injuries during the year. In 2009 there were four (4) women and three (3) men in the Board. Among the employees at the head office at the end of the year there were 11 (13) women and 21 (22) men, and 20 (26) women and 51 (51) men worked in the regions (including all microfinance and projects). On the leadership team, comprising the senior managers at head office plus the regional directors, there were eight men and two women. SF strives for a balance of gender at all levels and is conscious about this when employing new staff. The organizations contamination of the external environment will mostly be of an indirect nature. The Board considers this to have minimal contamination effect on the external environment. The organization has no order from the public authorities that has not been complied with. Financial Risk The Board continue to monitor the SFs financial risk, which is first and foremost tied up in currency variations. SFs expenditure is largely in currencies linked to the US dollar or the Euro and with most income in Norwegian kroner exchange rates play a large part in what SF is able to deliver to partners in the South. However, given the nature of SFs agreements with these partners, it is not SF that takes the financial risk but the partners themselves. During 2009 SF entered into fixed exchange rate contracts in order to secure the budgets at the favourable ex-

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change rate between the Norwegian kroner and the US dollar. Strømme Foundation has no external borrowing, so there will be no serious consequence for the organization if the interest rates should increase considerably. The credit risk is restricted to the microfinance operations in SMF AS. Future Perspective The results from 2009 show that the effect of the finance crisis on SFs finances have been minimal. The head office restructure has increased focus on fundraising and co-ordination, plus improved monitoring of results so that the Board believes SF is in a good position to respond to changes in the market for funds, whether they come from competitors or from general economic circumstances.

Conclusion The Board would like to thank the leadership team and all the employees for the results in 2009. Collaboration with local partners has been extremely good, and through continual competence building at all levels of the organization we have reason to believe that even more people have been given the chance they deserve to come out of poverty. Allocation of the result SFs surplus of NoK 8,529,680 is allocated to unrestricted retained earnings. The loss of NoK 20,219,161 (including currency loss) generated in the Microfinance operation is taken from restricted Microfinance Equity within SF.

Kristiansand, 12 May 2010

Geir Magnus Nyborg Chairman of the Board Svein Ove Faksvåg

Anna Minj

Inge Lønning

Trond Randøy

Olaf Gundersen

Liv Næss

Øyvind Aadland Secretary General

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Strømme Foundation Activity Account

Strømme Foundation 2009

Strømme Foundation 2008

Consolidated 2009

Consolidated 2008

Note Note Acquisition of funds 2 58 005 896 54 546 112 Public Sector grants 58 005 896 54 546 112 3 53 743 041 53 379 785 Private Donations 53 743 041 53 379 785 5 348 604 6 434 959 Corporate Sector 5 348 604 6 434 959 4 10 650 037 10 232 784 Contributions from other organisations 10 650 037 10 232 784 177 657 129 979 Other Income 177 657 129 979 7 694 488 5 157 431 Financial Income 694 488 5 157 431 128 619 723 129 881 050 Total Acquisition of funds 1 28 619 723 129 881 050 -13 082 881 -14 990 381 Cost of funds acquisition -13 082 881 -14 990 381 115 536 842 114 890 669 Gross Available funds 1 15 536 842 114 890 669 -6 135 840 -9 201 816 Administration costs -6 135 840 -9 201 816 109 401 002 105 688 853 Available for purpose activities 109 401 002 105 688 853 Purpose Activities 1 -103 891 927 -103 883 580 Total purpose activities -97 807 181 -103 883 580 17 5 509 075 1 805 273 Result before change in restricted equity 11 593 821 1 805 273 10 3 020 605 6 786 872 Change in Restricted Equity 3 020 605 6 786 872 8 529 680 8 592 145 Result after Change in Restricted Equity 14 614 426 8 592 145 - 15 -14 567 950 29 107 131 Result Microfinance -20 219 161 37 460 797 Result Mimeta -1 157 970 -6 038 270 37 699 276 Result -6 762 705 46 052 942 Allocations 8 529 680 8 592 145 Transferred to unrestricted reserves 13 456 456 8 592 145 -14 567 950 29 107 131 Transferred to restricted MF reserve -20 219 161 37 460 797 -6 038 270 37 699 276 Total Allocations -6 762 705 46 052 942 -

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Strømme Foundation Balance Sheet 31.12 Strømme Strømme Consolidated Consolidated Note ASSETS Note Foundation Foundation 2009 2008 2009 2008 Long term assets Fixed Assets 8 911 431 9 203 985 Property 8 911 431 12 152 687 339 329 597 944 Office furniture and equipment 339 329 597 944 6 9 250 761 9 801 929 Total fixed assets 9 250 761 12 750 631 Financial assets 37 659 847 900 000 Investment in subsidiaries 200 000 220 400 10b - 120 879 789 Microfinance & culture portfolio 125 118 180 141 473 819 19 16 73 052 665 3 000 000 Loan to subsidiaries - 11 567 397 1 071 737 Pension scheme (overfinanced) 567 397 1 071 737 111 279 909 125 851 526 Total financial assets 125 885 577 142 765 956 - 120 530 670 135 653 455 Current Assets 135 136 337 155 516 587 - 12 3 219 701 2 994 852 Property development 3 219 701 2 994 852 - - Receivables 1 169 907 3 823 318 Trade debtors 1 169 907 3 823 318 234 500 234 500 Prepaid expenditure 234 500 234 500 849 857 805 041 Public duties 849 857 805 041 312 573 941 253 Intercompany receivables - 853 497 588 362 Other receivables 853 497 588 362 16 3 420 334 6 392 474 Total receivables 3 107 761 5 451 221 - 30 000 2 002 000 Investments in shares and bonds 30 000 2 002 000 - 13 29 907 977 23 828 498 Bank and cash 29 907 977 24 065 501 - 36 578 012 35 217 824 Total current assets 36 265 439 34 513 574 - 157 108 682 170 871 279 TOTAL ASSETS 171 401 776 190 030 164

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Strømme Foundation Balance Sheet 31.12 Strømme Strømme Consolidated Consolidated Note Note Foundation Foundation EQUITY and LIABILITY 2009 2008 EQUITY 2009 2008 3 326 092 3 326 092 Founding Capital 3 326 092 3 326 092 3 326 092 3 326 092 3 326 092 3 326 092 Acquired Equity 11 217 267 14 757 627 Restricted Equity (SF projects) 11 217 267 14 757 627 121 450 462 92 454 707 Microfinance Equity 141 409 944 101 618 434 16 291 869 7 179 969 Unrestricted retained earnings 16 291 869 6 611 291 8 529 680 8 592 145 Result for the year - SF unrestricted 14 614 426 8 592 145 -14 567 950 29 107 131 Result for the year - MF -20 219 161 37 460 797 Result for the year - Mimeta -1 157 970 - (78 651) Currency differences & Donated Equity -3 951 821 2 330 713 142 921 328 152 012 928 Total acquired Equity 158 204 554 171 371 007 9 146 247 420 155 339 020 TOTAL EQUITY 161 530 646 174 697 099 18 LIABILITY Long Term Debt 11 1 795 978 2 023 484 Pension obligations 1 795 978 2 023 484 150 000 150 000 Legacy obligations 150 000 150 000 1 500 747 1 475 507 Staff Gratuities in Regional Offices 1 500 747 1 475 507 206 863 279 744 Other long term debt 206 863 279 744 16 3 653 588 3 928 735 Total Long term debt 3 653 588 3 928 735 Short term debt 1 986 063 3 972 605 Creditors 1 986 063 3 972 605 - 2 839 000 Public Grants/advance - 2 839 000 - 1 002 448 Unpaid project transfer - 1 002 448 2 133 200 1 711 708 Employees tax, social security 2 133 200 1 711 708 990 129 211 196 Intercompany debt - 2 098 280 1 866 567 Other accounts payable 2 098 280 1 878 567 16 7 207 672 11 603 524 Total current liability 6 217 543 11 404 328 10 861 260 15 532 259 TOTAL LIABILITY 9 871 131 15 333 063 157 108 680 170 871 279 TOTAL EQUITY AND LIABILITY 171 401 777 190 030 163

Svein Ove Faksvåg

Geir Magnus Nyborg Chairman of the Board

Inge Lønning

Olaf Gundersen

Anna Minj

Trond Randøy

Øyvind Aadland Secretary General

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Liv Næss

Strømme Foundation Cashflow (The indirect method) 2009 2008 Result 8 529 680 8 592 145 Profit/Loss from sale of securities -94 457 Ordinary depreciation 551 166 586 300 Adjustment in the value of securities -35 600 Change in long term debt -275 147 642 334 Changes in accounts payable -4 395 852 670 411 Difference between pension costs and payments 276 835 60 417 Non cash income -306 123 -30 000 Changes in restricted equity -3 020 605 -6 786 872 Changes in other current assets and liabilities 2 968 835 -2 192 672 Net cashflow from operational activity 4 234 331 1 506 463 Acquisition of fixed assets -757 106 Property Development Lillesand -224 849 -2 228 Profit from sale of property 9 895 Proceeds from the sale of securities 2 000 000 Acquisition of shares in subsidiary 70 000 -200 000 Net cashflow from investment activities 1 845 151 -949 439 Cashflow from financing activities - Opening balance of cash and cash equivalents 23 828 495 23 271 471 Net change in cash and cash equivalents 6 079 482 557 024 Closing balance of cash and cash equivalents 29 907 977 23 828 495 The balance consists of bank deposits and cash holdings Unused overdraft facility 1 000 000 1 000 000 Cash per balance sheet 29 907 977 23 828 495

Consolidated

Cash in SMF AS 15 682 482 25 006 Cash in Senter for Cultural Development 928 968 212 000 Total Cash 46 519 427 24 065 501

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Accounting Principles The financial statements of the Strømme Foundation (SF) are prepared in accordance with the Norwegian Accounting Act and the “Accounting Standard for Not-for-Profit organisations” from 2006, produced by The Norwegian Accounting Standards Board. This means that, in place of a traditional Profit and Loss Account, there is an Activity Account which should give the reader a better understanding of how Strømme Foundation has used the resources at its disposal in 2009. Consolidation As of the 1st April 2009 SF transferred all microfinance lending operations to Strømme Microfinance AS (SMF AS), and this is reflected in the consolidated figures. For the first quarter the microfinance operations remain in SF. As the nature of microfinance is from an accounting viewpoint fundamentally different from the rest of SF, the microfinance operations have been consolidated using the equity method. This means that the results from microfinance are presented net in the activity accounts as income and as restricted equity in the balance sheet. Principles of cost allocation in the Activity Accounts 2009 was the first year of SFs new five year Master Plan, and SF’s Board took the opportunity to fully review the cost allocation basis in the light of this change in strategy and the latest guidelines from the Norwegian Accounting Standards Board. Fundraising and Information As in previous years, all expenditure directly connected to personnel employed as fundraisers, and to solely fundraising activity, is classified 100% as a fundraising cost. This includes all direct marketing costs and all costs associated with our main fundraising products “Friend at Heart” and “Bridge Builder”. All expenditure on personnel and activity whose prime purpose is connected to information provision is allocated to purpose activity. The Regional Offices Strømme Foundation has four regional offices in West Africa (Mali); East Africa (Uganda); South America (Peru) and Asia (Sri Lanka) plus two satellite offices in Sudan and Bangladesh. From 2009, following the review of cost allocation basis, the full cost of these offices will be allocated to activity as a purpose cost. Support for program work from Head Office From 2009 all the costs of the “International Section” are allocated to activity and are purpose costs. The section is to co-ordinate, support, evaluate and monitor all program work as well as liason with public funding bodies such and NORAD and UD. Other support functions at Head Office The basis of allocation starts with salaries, which are allocated according to an estimate of the amount of time spent on different activities. From 2009 all admin costs that can be reasonably and consistently allocated to activity are allocated, while leaving those that can’t as admin costs. Thus admin costs are now all costs relating to the Board of SF, all audit costs, membership of networks, consultancy, finance costs and 50% of staff costs in the admin and finance departments. The table below shows how the allocation has been made. Note 1 Allocations basis Department Total Admin Fundraising Purpose Admin, HR and Finance 3,143,889 3,143,889 0 0 (unallocated) Admin, HR and Finance 3,552,556 917,569 1,072,698 1,562,289 (allocated) Board and Council 326,550 326,550 0 0 Secretary General’s Office 2,621,435 677,076 791,545 1,152,814 Quality Assurance Department 936,204 241,807 282,688 411,709 ICT at Head Office allocated 3,209,444 828,949 969,095 1,411,400 Total Shared Services 13,790,078 6,135,840 3,116,026 4,538,212 Communications Dept Costs 17,869,828 0 9,966,855 7,902,973 Internat. Section and Culture Initiative 6,146,935 0 0 6,146,935 Disbursement to Regional Offices and Implementing Partners 85,303,807 0 0 85,303,807 TOTAL 123,110,648 6,135,840 13,082,881 103,891,927

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Comments/Allocations basis Audit, depreciation, memberships, legal fees, 50% of salaries Allocation on the basis of salaries at Head Office (HO) Governance Costs - all unallocated Allocated by HO salary basis Allocated by HO salary basis Allocated by HO salary basis Allocation on the basis of activity

Transactions in Foreign currency Costs outside Norway are recorded at the exchange rate relating to the most recent transfer from Head Office. All regional office accounts are recorded at Head Office using these rates. During 2009 SF entered into forward exchange rate contracts for US Dollar. Foreign currency income is recorded at the spot rate on the day of receipt. Income Income is entered in the accounts according to the gross method. Costs are entered as they accrue, and income when it is realised. Bequests or donations are recorded as income when there is indisputable confirmation of receipt. SF follows strict guidelines concerning earmarked funds, which ensures that these funds cannot be used for activities other than those for which they were donated without specific authority. The Board has set regulations for the handling of earmarked funds when a project is closed. Unused earmarked funds are shown as restricted capital in the balance sheet. Classification and Valuation of Balance Sheet Items Current assets and short-term liabilities contain items due for payment within one year after purchase. Other items are classified as fixed/financial assets or long-term liabilities. Current assets are valued at the lowest of procurement cost and actual value. Other accounts receivable are included in the balance sheet at face value after deduction of provision for expected loss. Items in foreign currency are valued at year end exchange rates. Short-term liabilities are recorded at the nominal amount at the time of accrual. Fixed/financial assets are valued at procurement cost, but are depreciated to actual value if the fall in value is not expected to be temporary. Long-term debt is entered at the nominal amount at the time of establishment. Furniture and Equipment These fixed assets are entered in the balance sheet and depreciated over their life span if the life span is more than three years and the cost is higher than NOK 50 000. Maintenance of fixed assets is charged to operating costs, while renovation or upgrading is added to the cost value and is depreciated along with the asset. Shares in Subsidiary Companies and Affiliated Companies Shares in subsidiary companies and affiliated companies are recorded at historic cost. Short-term Investments Short-term investments (shares and share units considered to be current assets) are valued at the lowest of average procurement cost and actual value in the balance-sheet. Received interest and dividend from the companies are entered as other financial income. Pensions Pension costs and the pension obligations are calculated according to the principle of linear earning based on estimated factors for the discount rate; future regulation of salary, pensions and contributions from Social Security, future earnings on the pension fund as well as the actuarial conditions concerning death rate, voluntary resignations, etc. The pension fund is valued according to actual value and is deducted from the net pension obligations in the Balance Sheet. Changes in the obligation due to changes in the pension plans are allocated over the expected remaining contribution period. The same applies to estimate deviations to the extent they exceed 10% of the greater of the gross pension obligations and the pension funds. Arrangements with net obligation are shown as liability and arrangement with net over-financing is shown as financial asset.

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Notes for Strømme Foundation 2009 Note 2 – Public Sector Grants Donor Purpose 2009 Norwegian Agency for Dvlpm. Coop. (NORAD) Norwegian Agency for Dvlpm. Coop. (NORAD) Norwegian Ministry of Foreign Affairs (MFA) Norwegian Ministry of Foreign Affairs (MFA) Norwegian Ministry of Foreign Affairs (MFA) Norwegian Ministry of Foreign Affairs (MFA) Norwegian Ministry of Foreign Affairs (MFA) United Nations Development Program (UNDP) United States Agency for Intl Dvlpm (USAID) Swiss Agency for Development & Co-operation Fredskorpset - Young Fredskorpset - Norway Fredskorpset – Norway Regional Governments, Agder Cultiva, Kristiansand The Research Council of Norway MIC Foundation Total

2009 NOK Development Programmes 40 700 000 Information Activities 939 411 Education Program - Sudan 219 800 Improvement of Livelihood - Myanmar Restoration and Recovery - Sri Lanka 5 839 000 Disaster Relief for Victims of Ethnic Riots, Kenya Infrastructure projects, African Cultural Sector Education Intervention - Sudan 3 741 760 Northern Upper Nile - Education 837 532 Speed School Program - Mali 346 042 Act Now Program - Hald International Centre 1 910 000 South/South Exchange Program - East Africa 1 516 367 South/South Exchange Program - Asia 712 974 Cultural Centre / Art for the UN-house, Arendal Cultural Initiative Strømme Foundation 200 000 Production of Microfinance presentation 1 000 000 Bolivian youth musicians’ festival participation 43 000 58 005 896

2008 NOK 36 620 000 1 045 000 3 200 000 -64 143 5 000 000 2 000 000 500 000 1 187 629 366 885 2 341 827 1 073 834 810 080 165 000 300 000 54 546 112

These grants are earmarked to specific projects and are shown gross including the administrative support element. Settlement with the donor is made in arrears once a year. Unused capital must be returned. The current framework agreement with NORAD (2009/2013) requires a minimum contribution of 10 % from Strømme Foundation, and allows up to 8% administration support on the project cost. For MFA funded programmes, the self-contribution requirement varies from 0 to 30% and the administration support varies from 0 to 8%. Note 3 - Private Donations 2009 NOK Donor Individual donations 9 209 033 Fixed-term donations 37 654 398 Events, schools and artists 4 014 007 Testamentary donations 2 865 603 Disaster Relief & Rehabilitation Total 53 743 041

2008 NOK 9 449 896 38 337 225 4 671 391 714 598 206 675 53 379 785

Note 4 – Contributions from Other Organisations 2009 NOK Institution Purpose Geneva Global, USA Speed Schools and Women’s Savings Groups, West Africa 3 417 216 Geneva Global, USA Primary Education and Vocational skills, Bangladesh 1 739 674 Geneva Global, USA Education and Empowering adolescents, Peru 310 656 Lâkarmissionen, Sweden Business Development Services, East Africa 1 693 960 Oak Tree, Australia School construction & restoration, East Timor Disaster Response RLF, Sri Lanka Restoration and Recovery - Sri Lanka Operasjon Dagsverk Shonglap - Bangladesh 3 201 403 HALD international Centre ACT NOW partner admin support 35 500 Erikshjälpen, Sweden Speed Schools, Mali 214 627 Capital for Good, England Speed Schools, Burkina Faso 37 000 Total 10 650 036 Note 5 – Salaries and Personnel Expenses /other allowances 2009 NOK 2008 NOK Salaries Norway 14 432 691 14 424 283 Social Insurance Payment 2 412 357 2 246 403 Pension Costs 1 839 649 895 543 Other Costs Norway 473 969 815 580 Salaries and allowances Regional Offices. 8 272 143 5 515 615 Total 27 430 809 23 896 424

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2008 NOK 4 726 130 2 406 030 429 648 1 513 002 504 294 616 180 37 500 10 232 284

The average number of employees at Head Office was 34 (35). This amounts to 32 man-labour years in 2009, compared to 32 in 2008. In the Regional Offices the average number was 66, equivalent to 65 man-labour years, compared to 63 in 2008. The total salary cost for the Secretary General in 2009 was NOK 655.349 plus life insurance of NOK 3.234 and pension contributions of NOK 85.361. The Board members have received no remuneration other than travelling costs. Strømme Audit Fees Foundation 2009 NOK Statutory Audit Fees 230 000 Other certification (partner audit for public funders) 86 000 Other non-audit services Total 316 000 Note 6 – Fixed Assets All figures in NOK Cost price 01//01/09 Acquisitions/Disposals 2009 Cost price 31/12/09 Accumulated depreciation 31/12/09 Book value 31/12/09 The year’s ordinary depreciation Depreciation rate

Consolidated Accounts 2009 NOK 334 733 111 505 15 925 462 163

Business Furniture Property Premises and equipment 413 810 14 394 293 929 409 0 0 0 413 810 14 394 293 929 409 -35 220 -5 861 452 -590 080 378 590 8 532 841 339 329 0 292 551 258 615 0 % 2 -10% 20-30 %

Total 15 737 512 0 15 737 512 -6 486 752 9 250 760 551 166

Strømme Micro Finance AS is titleholder for the building site and part of the business premises. Since Strømme Foundation operates with an accounting principle to expense all equipment under NOK 50 000, the majority of the inventory is not included under fixed assets in the balance sheet. For the same reason fully depreciated assets do not appear here. All equipment in the Regional Offices is shown as project cost. Note 7 – Other Financial income/expenditure Financial Income 2009 Other Interest income 236 782 Net Financial Income in the South 306 573 Other financial income 151 132 Sale of forward exchange rate contracts 694 488 Net curr gains/loss in purpose Currency Exchange Gains 970 216 Currency exchange losses -277 793 Net gains shown in purpose costs 692 423

2008 534 920 175 344 4 447 167 5 157 431 1 428 909 -46 484 1 382 425

Note 8 – VAT There is a debtor of 850.000 NoK for refundable VAT. This is calculated based on the principles applied in prior years for reclaiming. In 2009 the legislation relating to VAT liability for voluntary organisations changed, and SF will be able to reclaim more than this amount, but the exact figure is not known. The difference will be accounted for as income in 2010.

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Note 9 Changes in Equity Strømme Foundation 31/12/2008 Founding Capital 3,326,092 Unrestricted equity 15,772,114 Prior Year adjustment 519,755 Adjusted Unrestricted Equity 16,291,869 Restricted Equity 14,757,627 Prior Year adjustment -519,755 Adjusted Restricted Equity 14,237,872 Microfinance within SF 121,483187 TOTAL EQUITY 155,339,020

8,529,680 -3,020,605 -14,567,950 -32,725

Change During 2009 31/12/2009 3,326,092 Result for the year 24,821,549 Adjustment to restricted equity 11,217,267 Q1 loss in SMF AS Correction to MF 106,882,512 146,247,623

A substantial part of fund-raised capital is linked directly to projects. Many of these are also financed through public sector grants. After the allocation of public sector grants according to the terms of the cooperation agreements, the fund-raised capital is used to cover Strømme Foundation’s own share. From year to year the usage of fundraised capital for this purpose will vary. Balance of closed projects will be reallocated to other projects according to agreed guidelines. After covering the project costs for 2009, the capital earmarked for projects decreased by 3.02 mNoK. Change in capital earmarked for projects Region 2009 Asia 4,622,540 East Africa 3,124,197 West Africa 530,930 South America 1,939,599 Global 1,000,000 Total 11,217,266

2008 4,792,135 6,865,214 84,530 2,495,993 14,237,871

Note 10 a – Investments in Subsidiary Companies All figures in NOK Name Number Nominal value Strømme Micro Finance AS 10 500 1 000 Mimeta AS 40 5 000

Change 2009/2008 -169,595 -3,741,016 446,400 -556,394 1,000,000 -3,020,605

Book value 10 500 000 200 000

Result 2009 -2 728 907 345 460

Equity 31/12/09 53 797 753 557 466

Strømme Micro Finance AS (SMF AS) with its main office in Kristiansand is a wholly-owned subsidiary company of SF. There is a subsidiary loan from SF to SMF As of 73.052.665. Mimeta AS was established in 2008 (18 month accounts shown in this report) with its main office in Kristiansand, and SF owns 65% of the share capital. Connected Parties With the exception of salaries and travel claims, there are no financial transactions with employees or connected persons in Strømme Foundation Norway. Outstanding loans to employees in the Regional Offices totalled NOK 305.135 at the year end compared to NOK 325.462 at the end of 2008. These are included in other assets in the balance. Note 10 b – Investments in Associated Companies All figures in NOK Name Number Nominal value Hald International Centre BA 200 1 000

Book Value 200 000

R esult 2009 72 684

Equity 31/12/2009 2 539 833

Hald International Centre (HIS) was in 2004 officially registered as a company with limited liability with its Head Office in Mandal. Strømme Foundation’s share in ownership and votes is 1/3. The objective of HIS is giving courses and training for work within missionary organisations, for evangelism and development work, as well as for exchange-programs in different parts of the world. HIS is a Not-for-Profit organization and cannot give dividends to the owners.

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Note 11 – Pension Obligations The Strømme Foundation has a pension scheme that is comparable to the State pension fund. For 2009, the scheme covers 34 (35) people. The Foundation has also signed an agreement for an AFP-plan. This agreement applies for 33 (34) people and is included in the list below. Actuarial calculations have been applied for calculating the obligations and costs in connection with the payment plans. The following assumptions have been used for the calculations: Discount rate Expected dividend Salary adjustments / year Yearly G-regulation / inflation Expected pension escalation Withdrawal probability AFP

2009 2008 5.40 % 5.80 % 5.70 % 5.80 % 4.50 % 4.00 % 4.25 % 3.75 % 4.25 % 3.75 % 25.0 % 25.0 %

Secured Secured Un-secured Un-secured system system system system 2009 2008 2009 2008 Gross pension obligations at 31.12 calculated at 15 343 987 15 905 506 1 217 083 1 326 260 - Value of pension funds at 31.12 calculated at -13 114 610 -11 986 151 0 0 + Deferred obligation in case of (loss) / profit -2 726 657 -4 858 651 356 956 447 168 = Calculated net pension obligations at 31.12 -497 280 -939 296 1 574 039 1 773 428 + Social Insurance contributions -70 117 -132 441 221 939 250 054 = Pension obligation as at 31.12 -567 397 -1 071 737 1 795 978 2 023 482 Net over-financing 567 397 1 071 737 Net contractual obligation 1 795 978 2 023 482 The year’s pension accrual 1 561 868 1 169 768 56 953 72 005 + interest cost 910 688 599 971 68 550 85 235 + administration cost 101 016 40 000 0 0 - Return on capital -728 122 -728 122 0 0 = Net pension cost 1 845 450 1 078 393 125 503 157 240 + Social Insurance 260 208 152 054 17 696 22 171 + Actuarial loss (gain) 274 901 0 (41 268) 0 = Total pension cost 2 380 559 1 230 447 101 931 179 411 The amount is included in Salaries and personnel expenses in the accounts All figures in NOK

Note 12 – Property under development In 2002 the Strømme Foundation took over a property in Lillesand which had been left to us as a legacy gift. The property was valued and entered into our accounts at MNOK 2.5 in 2004. Strømme Foundation has chosen to retain the property and seek to regulate it for residential use, and costs have been incurred in connection with creating these plans. Post balance sheet, Strømmestiftelsen entered into an agreement in April 2010 with Kaspar Stømme Eiendom to create a jointly owned company (Luntevika Eiendom AS) with the purpose of maximising the value of the legacy by developing the property. Note 13 – Liquidity and Restricted Assets Employees tax deducted account Restricted projects and public grant accounts Memorial Fund Restricted funds at the Regional Offices Total Restricted bank balance Free funds available in Norway Free funds available at Regional Offices Free available funds Total liquidity

2009 613 902 123 657 153 443 1 271 423 2 162 425 20 991 757 6 753 795 27 745 552 29 907 977

2008 645 604 616 800 196 968 3 810 848 5 270 220 8 347 717 10 210 561 18 558 278 23 828 489

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Note 14 – Collateral Security Part of the business premises and the building site are collateral for the overdraft facilities (limit MNOK 1.0). Book value as of 31/12/09 is MNOK 5.2. Note 15 Microfinance result in SF The microfinance portfolio was transferred from SF to SMF AS as of 31st March 2009, so the first quarters result for microfinance is shown in SF’s figures. Note 16 Long Term Debt and Receivables All debt and all receivables within Strømme Foundation are under 5 years duration with the exception of 70 052 665 NOK within “loan to subsidiaries” which is a sub-ordinated loan to Strømme Microfinance AS. Consolidated Accounts Note 17 Consolidated purpose activities The total purpose activities in the consolidated accounts are reduced by the grants that have been given from SF to SMF AS and included in the loan portfolio. Note 18 Total Equity Consolidated Accounts Founding Capital Unrestricted equity Prior Year adjustment - FK East Africa Adjusted Unrestricted Equity Restricted Equity SF Prior Year adjustment FK East Africa Adjusted Restricted Equity Restricted Equity MF Currency Adjustment Prior Year adjustment - Bdesh TOTAL EQUITY

31/12/2008 Change During 2009 3,326,092 15,203,436 519,755 15,723,191 13,456,456 SF & Mimeta Result for the year 14,757,627 -519,755 14,237,872 -3,020,605 Adjustment to restricted equity 141,409,944 -20,219,161 Result Microfinance -3,951,821 568,678 174,697,099

Note 19 Financial Assets – investment in MF Microfinance and Culture Investment Net assets in SMF AS Intercompany debt Minority Interest in SMF East Africa Mimeta As net assets (65%) Total Investment in MF and Culture

31/12/2009 3,326,092 29,179,647 11,217,267 117,238,962 568,678 161,530,646

NOK 53,797,752 72,356,165 -1,398,091 362,353 125,118,179

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Smiles from the 2009 SF magazines

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Thank you: Strømme Foundation wants to thank all our donors – and participants – and all who believe in us, for your support. Together we are working to eradicate poverty and for a world free from poverty. • Norwegian Ministry of Foreign Affairs (UD) • Norwegian Agency for Development Cooperation (NORAD) • Geneva Global (US foundation) • Fredskorpset Norway (The Norwegian Peace Corps) • Vest-Agder Fylkeskommune • Aust-Agder Fylkeskommune • Cultiva Figures from Strømme Business Partner Number of business partners 2009: 43 Outreach SBP employees 2009: 20.461 Number of micro shares and team agreements: 33 Main partners ABCenter Agder Energi Expert Skagerak Energi

Other donors First Securities RS Platou Markets AS Radisson Blue Alfa NOR AS Forlaget Press AS Sødal Invest Legitim AS Boomerang Media H2B Eiendom AS Skippergata Utvikling AS Tor Sandal Revisjonsfirma AS Hodcon AS Pusterommet AS NETWORK Outreach to Norwegian children/youths in 2009: 17.000

Partners Mosvold & Co Lauvland Øyeoptikk Hotel Norge Scantrade Formuesforvaltning TeamWorks Valero Dale+Bang Fundament Baker Hughes Avigo Kristiansand Skruefabrikk IT Total

Kindergardens, Schools, and participation on festivals: Kindergardens Flatefjell Solkollen Læringsverkstedet Sagatun

Mikroaksjonær/andelspartner Preventor Troll Active Stormberg Omnes Bygg Valero Datakameratene Beckmann Andås Begravelsesbyrå Kruse Smith Mosvold & Co Profitbase Stepchange Aspelund Eiendom Inventas produktdesign Jens Knutsen Mek. Verksted Øyvind Reinhardsen Arne Sørlie Frank Abrahamsen

Vegard Hansson Grete S. Risvold Bemanningsbyraaet.no Woldcam WestCap PriceWaterhouse Coopers Messmer AS

Primary schools Jordet Follese Ytre Torridal Sjøstrand Lindås Knarvik Borkedalen Skåredalen Havåsen Austrheim Vettre Rjukan Rollsløkke Secondary Schools Lillesand Oasen Haumyrheia Fiskå Tokke

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Brumunddal Moland Tingsaker Moltemyr Oddemarka Tinntjønn Gol Haraldsvang High Schools KVS Trondheim KG Oslo KVS Lyngdal Koppervik Ringsaker Sirdal Framnes Øvrebø Folk High Schools Ringerike Sagavoll Borgund Birkeland Nordhordland Bildøy Viken Molde Lundheim Fredtun Ringebu Høgtun Hallingdal Karmøy Universities University of Agder Ansgarskolen Gimlekollen Mediasenter Other Schools Hald Internasjonale Senter Festivals/sports clubs Sotra IL Arena Skjærgårds M&M Barn er Bra Brumunddal IL Søgne IL 29 schools contributing with fundraising campaigns 1.100 youths engaged in SKRIK campaigns.

Strømme Foundation Board and Council Members 2009 The board; 31 December 2009 Geir Magnus Nyborg - Chairman Svein Ove Faksvåg - new member in 2009 Liv Næss Gunvor K. Andresen Olaf Gundersen Egil Gjesteland Joanna Ilboudo Kabore Deputy Representatives Trond Randøy Asle Jøssang Jon Østby

Council members; 31 December 2009 Kurt Mosvold – Chairman Hanne-Grete Brommeland Larsen Ansgar Gabrielsen Arne Olav Øyhus Dagrun Eriksen Per Sævik Finn Arild Stie Rannveig Rivedal Nilsen Grethe Raddum Hege Wallevik Vidar Blakseth Gunnar Thelin Hilde Strømme Gunnleik Seierstad Jan Oddvar Skisland – new member in 2009 Knut Vollebæk

Strømme Foundation is member of the Norwegian Control Committee for Fundraising. Strømme Foundation is a signatory to the Code of Conduct for the International Red Cross and Red Crescent Movement and NGO’s in Disaster Relief. Editor: Egil Mongstad, Strømme Foundation Lay-out and graphic design: Oddvar Paulsen, Strømme Foundation All photos: ©Strømme Foundation + ©Per Fronth, page 11 and ©Elisabeth Midttveit, page 13.

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Skippergaten 3 • Box 414 • N-4664 Kristiansand Norway Tel +47 38 12 75 00 • Fax +47 38 02 57 10 • Org. no 952 002 139 E-mail: post@stromme.org • www.stromme.org www.strommestiftelsen.no