STR ØMME FOUNDATION ANNUAL REPOR T 2017
Contents
Outlook from the Secretary General 3 International Department, Communication & Fundraising and Financial Department 4-5 Support to projects 2017 by country and thematic goal 6-7 Strømme Foundation - Mission, Vision and Values 8-9 International Department – What – How and some results 10-11 Job creating – decent work and economic growth 12-13 Nikolai Astrup - Minister of International Development: Jobs are crucial for growth and sustainable development 14-15 Kristin Skogen Lund - Director of The Confederation of Norwegian Enterprise: Enterprise – an important ally for foreign aid 16-17 The importance of job – four stories – four families – four jobs 18-19 Report from the Strømme Foundation Board of Directors 20-22 Activity account and Balance sheet 23 Strømme Foundation – Purpose capital and Liability 24 Strømme Foundation Cashflow 25 Accounting Principles 25-26 Notes 26-32 Audit report 34 Board and Council members 35 Facts behind the figures 35
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Outlook from the Secretary General
The important challenge of creating jobs
As the Job Creation Organization, Strømme Foundation knows that a job is central to a person’s life in so many ways. It means an income, with all its consequences: Food on the table, housing, education for the children and the possibility to make plans for the future. It can also add a meaning to the everyday life, be one of the reasons you want to get up from bed in the morning and give you the feeling of contributing to something bigger. The challenge of creating enough jobs becomes greater and more important by the day. With a vast increase in the number of youth in poor countries, the need for new jobs is exploding. At the same time, we see the destructive alternatives for unemployed youth in many countries: Extremism, crime and unsafe migration with little chance of a positive outcome can at times be the only alternatives seen for youth with no hopes of a job. By acknowledging youth as a resource, instead of stigmatizing them as a problem, Strømme Foundation is ready to take the challenge! The results from 2017 are encouraging and further strengthens our faith in our thematic priorities and mode of operation. With 204 026 job opportunities created, our programs have clearly managed to get people started on their way out of poverty.
marry before they are 18. The proportion of child marriages has been reduced by 50 percent in the local communities where the programme has been implemented. Still, the most encouraging result from the programme is that more than 22 000 of the 28 000 youth who have completed the Samvad education continues to work as change agents in the communities through groups and networks of Samvad graduates. Though our actual programmes have been completed in many places, the results continue to grow, years after Strømme Foundation finished our part. This is truly help for self-help – and results that last. Partnership is central in Strømme Foundation’s approach. Through partnerships with donors in Norway, we can finance our global development work. Through partnerships with local NGOs in our project countries we implement our programmes. And last, but not least: With the United Nations’ Sustainable Development Goals (SDGs), we have a common roadmap for eradicating poverty. Strømme Foundation has played our part in this global partnership in 2017 and look forward to the continuation, working tirelessly to play a vital part in the ambitious goals to eradicate poverty and make the world a better place for all.
For example, in the Operation Days Work project in Nepal, which was completed in 2017, more than 7000 girls got a job, earning their own income, due to the vocational training they received in their Samvad classes. However, this was only parts of the success of the programme. A job can truly boost energy and motivation for further changes. Encouraged by their new knowledge and skills, the youth have achieved some impressive advocacy results. Among those are three municipalities being declared child marriage free zone, while all the girls in the programme have declared they will not
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Kristine S. Sødal Secretary General
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Strømme Foundation 2017
2017 – International Department Job creating - and education
the outlines of the new Strategic Plan for 2019-2023 were designed, and this will be fully developed in the next year.
Strømme Foundation (SF) works to reach the poorest of the poor, through improving livelihoods and providing quality education. Working in 13 countries in Asia, East Africa, West Africa and South America, SF’s focus is on women, children and marginalised groups - those who have been left the furthest behind in development. Lack of job opportunities and economic empowerment remains a barrier to development for these groups. In addition to education, SF therefore focuses on job creation. 204 026 job opportunities were created through SF’s work in 2017. 3,223 youth attended vocational training, strengthening their economic prospects.
Anti-Corruption Report 2017 Zero tolerance
Job creation is central to development. Youth who have their own income can contribute to the family economy, but also learn to be independent. SF combines job creation with savings groups. Participants learn to plan for the future, but also gain access to small loans. This allows them to expand on their businesses, generating more income. In the last year, 291 239 people participated in SF savings and loans groups. Furthermore, when women work, their children are much more likely to go to school. SF is continuing to work towards quality education for all. In 2017, 21,507 out-of-school children returned to education. In addition, 4,108 number of women learned to read and write through SF’s Adult Literacy programmes since the strategic period started in 2014.
Deviation cases 2017 Total ongoing cases year end of 2017 New cases in 2017 Cases from 2016 and older Reported through whistle-blower channel Reported through internal partner assessment Resolved cases 2017
For Strømme Foundation, 2017 has been a year of learning, as recommendations from the extensive mid-term evaluations done last year have been implemented. Cross-organisational learning is central to ensuring the continuous strengthening of programmes. In November, programme and finance staff from West Africa, East Africa and Norway travelled to Asia and visited Nepal, to learn more about the adolescent girls’ empowerment programmes ‘Samvad’. The aim is to implement this model in West-Africa and further strengthen similar work in East Africa. SF is also focussing on how corruption hinders development. A detailed anti-corruption study done in Uganda and Tanzania has been a strong basis for designing outreach activities to empower local communities to fight corruption. In 2017, SF also set up a Disability Fund and regions designed plans for mainstreaming disability inclusion in programming. As Strømme Foundation is entering the last year of this Strategic Period, it is with a focus on sustainability and creating lasting change. At the same time, SF has been looking to the future. In September, a Programme Annual Meeting with all the regions was held in Norway. During the week-long workshop,
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Strømme Foundation sees fighting corruption and being transparent both within our organization and amongst our partners as one of our main goals. In line with practising zero tolerance for corruption we work on developing tools to help us prevent corruption. In 2018 we will introduce two important tools: improved partner assessment tool and Nano training programme for all Strømme Foundation staff and all partner staff. 16 10 6 9 7 5
We see a trend that more cases are identified through internal partner assessment and less cases from whistleblower channel, which is a positive development. We focus on partner capacity building by supporting on improving internal control and financial procedures. In addition to focusing on preventing corruption within partners Strømme Foundation works to ensure that communities where we operate are aware of, prevent, and act against corruption in the society.
2017 in Communication Department Successful match funding campaign
The year 2017 ended with a total income of close to 79,3 million NOK raised through different activities in the Communication and Marketing department. We are pleased and our gratitude goes to all our individual donors, fixed term donors, the corporate sector, schools, artists, and testamentary donations and to all those of you who share our vision and believe in the way we work. Yet, the year ended with a reduction in income of about 8,2 million NOK compared to last year. This is mostly due to a pronounced reduction in testamentary donations. Over the last five years we have seen a positive trend when it comes to the number of fixed term donors. In 2017 however, the number of new donors has declined by 450, compared to 2016. The main reason for this is reduced use of face to face recruitment. Also, the fundraising around the
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Motherhood campaign has affected the result as we were not able to generate new donors as we had planned for. However, we constantly work to turn the trend in a positive way again. Among other interventions and activities done by the Communication and Marketing department we will highlight: • Digital marketing We have started working more strategically on recruitment of new donors from the digital market through Facebook, websites and so on. This focus is due to new market trends, and competition from other NGOs. We will increase this work in the years to come. • Match Funding Strømme Foundation conducted the largest match funding campaign ever arranged in Norway. One donor matched other donors with 1 NOK for each incoming 1 NOK up to a maximum of 10 million NOK. The total result was 22,5 million NOK for the campaign. • Motherhood We launched a web concept called “Motherhood” together with Aftenposten and Hacienda film. Motherhood is a TV-documentary focusing on being a mother in Nepal, and raises issues like fighting the cast system, education, human rights and dignity. The documentary was broadcasted on Aftenposten TV, and resulted in 650.000 views. This gave a lot of attention to women’s fight for justice and equal rights in Nepal, and to Strømme Foundations work in Nepal.
• Business partner In 2017 we have made several substantial new agreements and long-term agreements with major companies and business partners. • Facebook We gained over 20.000 followers and 20.000 likes on SFs Facebook-pages. • Fixed term donors We continue our work to keep all our fixed term donors, to recruit new donors, and to inform our donors and public about our work using different media channels like our own media, and trough national and local media. Strømme Foundation’s main objectives in Norway are to raise funds through recruiting long term individual donors, from schools, institutions and in cooperation with corporates and private sector and through different campaigns, fundraising events, social media and other activities. We work to advocate for the poor among politicians and decision makers, and we contribute to the national debate in media about development aid. We also work to do development education and increase people’s knowledge of poverty and poverty eradication.
Testamentary donations 2 629 853 Other Income 1 122 743 Events, schools and artists 6 415 604 Public Sector Grants Corporate Sector 103 552 690 15 318 521
SF Income 2017
SF Income 2017 2016 Public sector grants 103 552 690 82 834 592 Fixed Term Donations Grants from other organisations 29 353 115 21 934 008 41 270 629 Individual donations 9 439 273 8 102 262 Fixed-term donations 41 270 629 40 741 333 Corporate sector * 15 318 521 16 622 300 Events, schools and artists 6 415 604 3 873 522 Testamentary donations 2 629 853 11 518 298 Other income 1 122 743 2 634 327 Total funds acquired 209 102 427 188 260 640
NOK 1000
*) Funds collected through Major Donor in 2017 are actually larger, but are accounted for in another fiscal year. (See also Note 6)
Individual Donors 9 439 273 Grants from other Organisations 29 353 115
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Support to projects 2017 by country and thematic goal including distributed regional office capacity building Figures in NOK
GLOBAL Education Act Now 0 FK - Myrada/FVTR 0 Fafo - Vision 2030 2 439 550 Global programmes 0
MF/ CMMF* 0 0 0 0
Social Capacity Building protection Advocacy 1 657 308 410 218 0 3 141 979
0 0 0 0
Natural Disasters Response
Total
No. of Partners
0 0 0 0
1 657 308 410 218 2 439 550 4 507 076
1 1 1 3
WEST AFRICA Education
MF/ CMMF*
Mali 29 627 094 3 275 315 Burkina Faso 10 916 984 1 804 344 Niger 12 552 246 2 533 332 West Africa 53 096 324 7 612 991
No. of Capacity Social Natural Total Partners Building protection Disasters Advocacy Response 2 809 688 0 0 35 712 097 12 1 522 124 0 0 14 243 452 5 1 454 088 0 0 16 539 666 6 5 785 901 0 0 66 495 216 23
NIGER
MALI
BURKINA FASO
PERU BOLIVIA
SOUTH AMERICA Education Peru 3 493 448 Bolivia 1 342 543 South America 4 835 991
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MF/ CMMF*
Capacity Building Advocacy
Social protection
Natural Disasters Response
2 220 238 1 045 374 3 265 613
817 202 1 894 823 2 712 026
745 903 2 636 224 3 382 127
104 614 7 381 406 0 6 918 964 104 614 14 300 370
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Total
No. of Partners 4 5 9
Education
MF/ CMMF*
Capacity Natural Social Building Protection Disasters Advocacy Response
Total 111 733 088 30 014 029 27 155 185 5 613 298
No.of partners
Total
2 084 367 176 599 968
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Total number of right-holders under 18 years: 318 409
Total number of right-holders: 1 024 426
Female 199 194 Male 119 215
Female 728 924 Male 295 502
ASIA Education Sri Lanka 2 143 529 Nepal 7 825 009 Bangladesh 7 132 525 Myanmar 814 239 Asia 17 915 302
MF/ CMMF* 1 474 505 2 712 326 5 912 466 1 037 896 11 137 193
Social protection
Capacity Building Advocacy 3 386 378 3 409 486 3 377 211 2 104 352 12 277 427
122 981 710 433 782 901 292 834 1 909 150
Natural Disasters Response 377 461 821 802 747 866 0 1 947 129
NEPAL
UGANDA
No. of Partners
7 504 853 15 479 057 17 952 970 4 249 321 45 186 201
6 9 6 2 23
MYANMAR
BANGLADESH
SOUTH SUDAN
Total
SRI LANKA
KENYA
TANZANIA
EAST AFRICA Education
MF/ CMMF*
Capacity Building Advocacy
Social protection
Uganda 4 503 886 Tanzania 2 987 235 Kenya 2 023 254 Sør Sudan 23 931 547 East Africa 33 445 922
3 773 190 1 638 788 712 568 1 873 687 7 998 233
1 947 025 920 207 902 802 542 272 4 312 306
300 877 697 7 159 13 288 322 022
Natural Disasters Response 32 623 0 0 0 32 623
Total
No. of Partners
10 557 601 5 546 927 3 645 783 26 360 795 46 111 106
10 4 2 14 30
*) Microfinance - technical skills training/Community managed microfinance
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Great things can happen when many share one common vision! In Strømme Foundation our Vision is:
A World Free From Strømme Foundation is inspired by the Christian view of God´s creation and the absolute dignity of man. We strive to approach people with openness and respect, regardless of religion, ethnicity, caste, gender, disability or other minority status. Strømme Foundation is committed to empowering people so that they overcome the root causes of poverty.
In Strømme Foundation our Mission is:
To Eradicate Poverty With a deep respect for human dignity and conviction about the value of equitable partnership, Strømme Foundation works to empower the poor so that they take charge of their own lives and communities. We strive to facilitate change, not only by providing material needs, but also by creating opportunities for people to utilise their talents in a value-based development process. Strømme Foundation works through local partners and through two intervention approaches – microfinance and education. A major focus for our work is to facilitate for people so they can create their own jobs.
Our Values Human Dignity We believe in the inherent, inalienable rights of every individual. At Strømme Foundation, this is considered to be the most important human right from which all other fundamental human rights are derived.
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Justice We have a drive to fulfil not only legal, but also social rights of communities and individuals in creating a more just distribution of society’s resources and power.
Solidarity We identify empathically with the plight of marginalised and discriminated groups.
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Poverty
Microfinance and Community Managed Microfinance (CMMF) Microfinance creates access to sustainable income sources and provides a means by which the poor can act upon their decisions. The focus here is to provide access to financial services such as loans, places to save, insurance etc. Capacity building of the participants and clients is also an important component of the programmes in question. The microfinance intervention will use the methods of both institutional MF as well as CommunityManaged Microfinance.
Education
Education helps people develop the attitudes, skills and knowledge needed to make informed decisions concerning the development of themselves and their communities. Our main focus is on facilitating poor children at risk by strengthening the fostering environment within the local community. Interventions are carried out within primary education, adult literacy, vocational skills/life skills and awareness building, and with a special and paramount focus on education for girls.
Cross Cutting Issues Gender Equality SF strives to promote equal rights and opportunities both for women and men to share in the socio-political and economic order.
Environmental Sustainability SF seeks to mainstream environmental awareness, climate change mitigation and adaptation into existing programmes.
Inclusion SF promotes the inclusion, non-discrimination and empowerment of marginalised groups, including people marginalised by disability, ethnicity, caste and other minority statuses.
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International Department 2017
East Africa
West Africa
What - How and some results
What is our focus?
How do we work?
Achievements and Challenges
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• Strengthen the quality of primary schools. • Enhance access to pre-primary education. • Life skills for adolescents. • Community-managed microfinance. • Enhance access to sustainable income sources and social protection.
• • • •
Accelerated learning programmes for children who have never been to school, or dropped out during the course of their education. The purpose is to ensure their re-entrance into the formal school in Grade 3 or 4 through a 9- month intensive programme (Speed School) or into secondary school through a 2-year accelerated program (Speed School 2). Vocational training for youth. Active literacy for women. Community saving Groups.
• • •
Since 2005, more than 191,000 children between the ages of 8 to 12 have been enrolled in Speed School. In 2017 - 20,176 children enrolled in 716 Speed Schools, half of them girls. At the end of the programme 91% were eligible to transfer to primary school. Due to extra funding, the number of Ac tive Literacy (AL) centres increased from the planned 35 to 105, reaching nearly three times as many women. AL does not only provide women with basic literacy, but also strengthens civil society. In Burkina Faso, female representatives in local decision-making bodies have grown from 2% to 22% over the last three years. 118,042 people in 4,807 savings groups.
• Strengthen the quality of primary schools. • Enhance access to pre-primary schools. • Enhance access to sustainable income sources and social protection.
• Strengthen infrastructure and soft skills of teachers in primary and pre-primary schools. Ensuring the enrolment of children. • Teacher-training. • Vocational-training and skills training for adolescents and youth.
• •
3,159 households crossed the poverty line and 72,639 jobs were created in 2017. 774 children transferred from Early Child hood Centres to primary schools.
• •
3,815 girls gained empowerment and independence through the Bonga programme. As a result, eight in ten girls report that they are less dependent on their parents/guardians and spouses. Activities in South Sudan were delayed and severely affected by the armed conflict in the country. The conflict has resulted in pro- gramme participants fleeing across the bor der to Uganda. SF has transferred some projects to these refugee settlements, such as Bonga, Vocational Training and savings groups.
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Asia
Norway
South America
• Strengthen public sector and civil society. • Enhanced access to sustainable income sources. • Ensure quality education for disadvantaged groups, including building life skills for adolescents. • Strengthen social protection for children and adolescents living in violent environments.
• • •
Primary and pre-primary education Literacy and livelihood support for indigenous women. Social protection for at-risk children and adolescents
• •
Using a holistic approach, SF Asia strengthens community structures and promotes collective efforts to empower marginalised communities to lead their own development in a sustainable way. Life skills training for adolescents
• Increase children’s learning-capabilities and improve the learning environment in schools through providing education in their mother tongue (Intercultural Bilingual Education, IBE). • Protecting children against violence through child surveillance committees intervening in families where violence occurs. • Teaching women how to read and write. Give women training about income generating activities.
• Emphasis on PMEAL (Planning, monitoring, evaluation, accountability and learning) • Ensuring that reports and applications are submitted to Norad and other institutional donors in a timely and effective manner. • Developing and maintaining good systems for detecting and addressing corruption. • Building the capacity of regions in cross-cutting issues (gender equality, environmental sustainability, inclusion – particularly of persons with disabilities).
• • • •
19,996 families crossed the poverty line. 8,014 girls empowered through the Samvad /Shonglap programme. As a result of Samvad advocacy in Nepal, 25 villages have been declared Open Defecation Free, 5 villages have been declared free from caste-based discrimination and 3 villages have been declared free from child marriage. More than 100,000 community members and local government officials have been sensitised on the consequences of child marriage and publicly expressed commit- ment to end this practice Last year, in the first local elections in Nepal for 20 years, 159 SF beneficiaries ran for various local offices and 56 were elected, including six Samvad animators.
• • • •
• • •
Since the start of the programme, 8,146 children have benefited from IBE. The programme is be ing transferred to the Government in Peru, ensuring sustainability of IBE model. Since 2014, the number of savings groups has grown to 1,130. In 2017 the groups have reached a total savings amount of more than 3,900,000 NOK. The savings groups are also important to women’s empowerment, 85% report they have improved their self-esteem because of partici pating in the groups. Since 2014, SF has worked with 530 former street children in Bolivia, fulfilling their rights and strengthening their social and life skills. The Alalay care and protection model is also being transferred to government centres.
• • • •
Capacity building of regional offices and partners. Fundraising and maintaining a good relationship with our donors. Coordination and sharing of good practices between regions. Quality assurance.
We have continued to build a good relationship with Norad and other institutional donors. Learning from evaluations and ensuring that recommendations are followed up is always a challenge Innovation is something we wish to have a greater focus on, and something that we would like to develop in the new strategic period.
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UN Sustainable Development Goals
By 2030, the goal is to achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value. By 2020, the goal is to substantially reduce the proportion of youth not in employment, education or training. Based on ILO and UNs Sustainable Development Goals – Goal no 8
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Start by doing what is necessary, then what is possible, and suddenly you are doing the impossible. Francis of Assisi
Sustainable development cannot be achieved without decent work, and vice versa. Decent sums up the aspirations of people in their working lives. It involves opportunities for work that is productive and delivers a fair income, security in the workplace and social protection for families, and equality of opportunity and treatment for all women and men.
Facts about unemployment, and jobs •
Global unemployment increased from 170 million in 2007 to nearly 202 million in 2012, of which about 75 million are young women and men
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Nearly 2.2 billion people live below the US$2 poverty line and that poverty eradication is only possible through stable and well-paid jobs
• 470 million jobs are needed globally for new entrants to the labour market between 2016 and 2030
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Jobs are crucial for growth and sustainable development It is jobs – together with education, innovation and the use of new technology, that will create growth and development in the global south. Our new Minister of International Development has no doubt that the private sector trough trade and industry, in close cooperation with private organisations, should and will play a bigger and more important role to achieve sustainable growth and development in developing countries.
‘In Norway we have had a long tradition of foreign aid and development. But we have not been quite so good at communicating how important it is to create jobs to attain this. We now see that it is not possible to develop sustainable communities without a profitable private sector that creates employment,’ says Minister of International Development Nikolai Astrup. It is only a few months ago since he took position as Norway’s new Minister of International Development, a job that has already taken him to Ghana and Nepal and many other countries around the world. ‘To put it this way: I’ve not spent all that many days at the office since I began here,’ says Astrup. A threat Creating jobs is important to the new minister. ‘We know that the population of Africa will get close to two billion by 2050. 70 percent of them will be under 30 years old. That means that Africa will have a yearly need for seven to eight million jobs. This is a big challenge,’ says Astrup. He adds that work is crucial, not only for the development of stable and secure communities, but also in curbing extremism and recruitment to extremist groups. ‘“Al Shabab feeds on unemployment”, said Somalia’s Finance Minister in a meeting we had. He means that Somalia will not survive as a state if he as Finance Minister does not succeed in taking the country’s economy in a good direction. It is a serious threat, not just to Somalia, but to the whole world,’ says Astrup. He believes this is a good illustration of how one should look at the relationship between security policies and developmental policies. ‘All too often they are regarded as being two separate areas. There are some who, for example, believe we shouldn’t use foreign aid funds in the Sahel region. But we think that a stable and secure situation with places of work and job opportunities are vital if we are to achieve good results in what we are doing for climate, agriculture, education and health. That’s why we need to look at this in context,’ says the minister. Vocational training Astrup underlines that the Government’s investment in education is also connected to job creation and says that a plan for an increase in contributions towards vocational education will be submitted shortly. ‘We are at a time where the employment market is changing. Jobs are becoming more digitalised and automated and robots are taking over. For this reason, it is important to develop enter-
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prises and education that are adapted for the jobs of tomorrow,’ says Astrup. He also stresses how important it is to build sustainable institutions that can coordinate cooperation, for example within taxes, maritime businesses, the war on corruption, and many other areas, so that international and local businesses can invest and create jobs. ‘Just before Easter I was in Ghana with some Norwegian companies. Everyone referred to the uncertainty attached to unpredictable framework conditions, in relation to both taxes and duties and good governance. They also pointed to the need for a competent workforce. In Ethiopia the Norwegian company Yara is investing one billion dollars in a potassium mine. To get the workforce for these jobs, we have begun to work together with The Development Fund, which will be responsible for vocational training to train workers up for these jobs. This is a good example of how civil society and the private sector can work together to create growth. This way we get developmental effects from a big investment and that is very important if we are going to see long-term, lasting development,’ says Astrup. Agreement He believes that civil society also has an important role in contributing to job creation. ’A company takes a big risk when investing in a country. At this stage the Norwegian government can contribute funds for risk analysis. But civil society can, with its local knowledge and amazing competencies, help to reduce risk, for example by working towards access to a qualified workforce. So, interaction is important, not just within government, where different departments must work together to avoid competing with or sabotaging one another, but between all the positive efforts that are pulling in the same direction,’ says the development minister. Even though the risk may be great, the minister believes that Norwegian businesses should be very interested in these markets because Africa and some parts of Asia are the growth areas of the future. Not Europe. A Kinder surprise egg He believes that new technology will be vital in the jobs of the future and that new technology can help developing countries skip some of the rungs of the development ladder that we climbed up. ‘The mobile telephone, for example, gives access to information that was never available for those in poverty before. It is a
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Without a profitable private sector creating employment, it is not possible to develop sustainable communities. Nikolai Astrup Minister of International Development
Jobs are crucial for creating growth and development in the global south, says Nikolai Astrup and he believes civil society has an important partnership role in job creation. Kinder surprise egg with big possibilities in the battle against poverty,’ he says. ‘The possibilities are many. If one looks at the world, we have never had it so good. And the possibility of doing even more for
so many people is enormous, not least because we have new technology that gives us jobs and possibilities that didn’t exist before. So, although there are many challenges I am nevertheless optimistic, because technology opens new jobs and new opportunities,’ says Astrup.
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Enterprise – an important ally for foreign aid
‘There is no doubt that Africa is the continent of opportunity, but it is not easy to earn money here,’ says director of The Confederation of Norwegian Enterprise (CNE), Kristin Skogen Lund. She believes that enterprise has a very important role to play in creating and developing jobs in the global south.
CNE’s director believes there are many opportunities for those who want to invest in developing countries. ‘But it will be demanding. One has to have a lot of determination and it is not particularly straightforward to achieve profitability here,’ says Skogen Lund. She has been in the sector for several years and knows many of the Norwegian actors. ‘I have seen the work they are doing and there are many challenges, not least in relation to laws, regulations, corruption and so on. These are areas where it is of course very important to conduct matters in the correct fashion.’ And Skogen Lund stresses, ‘A lack of good systems and structures makes it challenging to earn money here.’ Less effective But more companies and individuals are investing. Skogen Lund has seen that for some this is based on a desire to help create economic growth. At the same time, they are particularly motivated to work towards developing local enterprises, by sharing their knowledge and competence. ‘It is of course about respecting your employees and ensuring good, safe workplaces. We could have had a much greater presence in many of these countries but we should also respect the fact that many hesitate. At the same time, I think that those who are there are doing a lot of good,’ says Skogen Lund. She is in no doubt that we could have made more progress and believes that aid efforts must accept criticism and take some of the blame for the fact that businesses have not taken things further. ‘I believe that Norwegian development assistance has looked at this the wrong way. Many have looked at enterprise and developing jobs and local businesses as something that tarnishes the noble intentions of foreign aid. Fortunately, I think development has changed its viewpoint. But if anything represents effective aid, it is arranging and helping to build a foundation for jobs and developing enterprises. The fact that Norwegian development assistance has avoided a closer partnership with business, has in my opinion contributed to making Norwegian aid less effective,’ says Skogen Lund. Education CNE’s director says that it is very important that private organisations and enterprises can work together. ‘Foreign aid does need enterprise precisely so that it can bring
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its work into effect. Take for example education. When I worked for Telenor in Myanmar, we were involved in building telecommunications infrastructure. We also arranged expansion of the electricity grid. Access to electricity will certainly have a big impact in future for children when they do their homework in the evenings,’ she says. Formalising rights Skogen Lund also cites the ‘strategic partnership’ project, where CNE works together with the Foreign Office. The project aims to encourage Norwegian companies to do business in countries where we have foreign aid. The project will strengthen what the Norwegian businesses are doing, in line with the objectives Norway has for foreign aid. ‘In this project vocational training is important. Africa has a large young population, which presents a big challenge if they don’t enter employment. Exclusion from the job market creates great inequality, will create social unrest, migration and everything we see developing in society,’ she says. She points to casual labour, which accounts for a lot of jobs. ‘These are often positions without a safety net or rights. Often it is women who have these jobs. For these employees it is important to work towards formalising their rights in relation to the work they do,’ says the director. Structures CNE, with support from Norad and the Foreign Office, has partnerships with national employer organisations in several countries and contributes towards setting up structures for organised employment. ‘As employers it is important to have structures and regulations in place in relation to conflict resolution and rights that apply to everyone,’ says Skogen Lund. New technology In 2019 the international employment organisation (ILO) celebrates its centenary. The director of CNE is part of an international commission appointed by ILO that will consider the employment of tomorrow, ‘Future of Work’. ‘It is difficult to predict, but one thing is certain: it won’t be just more of the way we have had it. We are entering a time of great change in the job market, partly due to what’s happening in technology and partly because much of the new technology is being developed by people who do not take any social responsibility. We don’t have any common global policies that
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The fact that Norwegian development assistance has avoided a closer partnership with business, has in my opinion contributed to making Norwegian aid less effective. Kristin Skogen Lund, Director The Confederation of Norwegian Enterprise (CNE)
Building foundations for jobs and developing enterprises is important for economic growth, and development in the global south, says director of The Confederation of Norwegian Enterprise (CNE), Kristin Skogen Lund. Foto: Aksel Jermstad
can govern this either. That is why this is a development that we don’t have complete control over, whether we like it or not,’ Skogen Lund says. ‘At the same time, the big economic points of gravity in the world are in the process of moving away from the West. It isn’t necessarily wrong, but it is happening. So, what will the jobs of the future look like? 100 years ago, we made a living from
producing food; we don’t do that anymore. Now we talk more about services. The job market is becoming more and more borderless and encompasses developing nations. This offers great opportunities for work, including jobs for the young generation we see in Africa,’ says the CNE director.
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The Importance of Job
Tailormade way out of poverty Sujata’s business does not only give her an income to pay for her childrens’ school expenses. She has now also given jobs to two other women. Sujatha initially launched a business to help meet the household expenses for her family. To keep up with the increasing demand, Sujatha hired two young women from her neighbourhood. Sujatha seems very concerned about the welfare of her employees. The two assistants are paid by piece at the end of each week so that they too can meet their household needs.
Anuradhapura, Sri Lanka: Sujatha Kumari Weerasinghe (31) is an emerging entrepreneur who has been in business for nearly a year now. She was a student at the tailoring course done by Strømme Foundation partner Rajarata Praja Kendraya (RPK) in Kekirawa in the Anuradhapura district of Sri Lanka. After completing the course, she started her own business.
Sujatha and her two assistants make items such as skirts, dresses, school uniforms, blouses and saree jackets. Sujatha’s products reach the markets in Kandy and Galnewa through three buyers to whom she supplies regularly. She also supplies to the demand from her neighbours. She earns around LKR 25,000 (155 USD) a month while her daily earnings exceed LKR 1000 (about 6 USD a day). “I take care of some of the household expenses now. I pay for the children’s school and tuition fees and for the food we need,” Sujatha says proudly.
A Mandazi shop in Gulu
Her mother was killed. Her father married again and left his children. Jennifer barely managed to complete 5th Grade and married at young age to secure the future of her younger siblings. A one-year education programme with vocational training gave her job, income and hope for the future. Jennifer learnt about Bonga programme in a meeting. She talked to her husband about this and he gave her the permission to join. In Bonga, Jennifer learnt valuable lessons that changed her life. When it was time to choose a vocational training activity, her husband encouraged her to go for Catering. He pledged to support her by growing sunflowers and processing it for her to use in her business and sell as an extra source of income. “I am really happy to have a supportive husband, she says with a smiling face.
Gulu, Uganda: Jennifer Acen is a 20-year-old mother with four children, and two nephews to look after. Her mother was killed in the civil war in Gulu by the Lord Resistance Army (LRA) rebels. Her father later abandoned them and married another woman. She could not bear seeing her siblings not catered for, so she decided to get married. It is common for young girls that have been abandoned or in poverty to seek marriage as an option to a better life. Jennifer became a complete house wife, shy, with a very low self-esteem.
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After finishing Bonga in December last year, Jennifer started a Mandazi business (a tea snack common in Uganda). She started out with UGX 12,000 (approximately US$ 3) which she used to buy the flour, oil and other ingredients used to make what is a delicacy for many Ugandans. She is now able to supplement to her husband’s income and help care of home needs, pay school fees for the children and attend to other responsibilities.
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Girl with abilities With the early loss of her father and blindness on one eye, the future of Ayasha from Cox Bazar looked bleak. Shonglap changed everything.
Cox Bazar, Bangladesh: Ayasha Siddike (18) has five sisters and one brother, and her father’s death is 2013 had a dramatic impact on the family, emotionally as well as economically. Her father was a fisherman and the family’s bread winner. When he passed away, they could no longer afford even the basics in their daily lives. This meant the end of schooling for Ayasha who dropped out of school in 7th Grade.
After two difficult years, things started to change for the better when Ayasha joined a Shonglap group in 2015. - I received vocational training and in 2016 I took an interest rate free loan and started with a kitchen garden. The following year, she bought a sewing machine, and Courageous and determined, Ayasha built her financial strength to go back to school. Ayasha was re-admitted to class 8 at high school in 2016. She successfully passed the JSC exam in 2017. Ayasha has been able change her destiny through the opportunities she received from Shonglap. - Shonglap soft loan is very effective for Shonglap girls. It has changed my life. Now, I have a dream to be a “Change Agent” in my village. I will work to change the lives of other girls, says Ayasha. She ensures that her younger brother receives her support to continue his education. Ayasha dreams of establishing a tailoring shop in Cox’s Bazar town one day. She also wants to be a teacher after completing her degree.
A “ferry” tale
Breaking professional gender stereotypes: Mariam is now a successful pirogue sailor in Timbuktu, Mali. Foundation’s savings groups, she gained both inspiration and an opportunity for a loan to start a business. She says “Every Saturday, I wanted to go to the market in the village of Issa Faye, which is 30 kilometres away. I decided to take a loan of 500 000 Franc CFA (about 940 US$) to buy a dugout canoe to reach the market more easily, and to help others reach the market. Now, I earn more than 50 000 francs per week (around 94 US dollars)”.
Timbuktu, Mali: Being a pirogue (type of ferry boat) guide has traditionally been a man’s job. It is a profession that requires both strength and courage. Yet Mariam Maïga has decided to break with stereotypes and join the trade. As a child, Mariam never had the chance to go to school. Married with four children, it seemed almost impossible for her to start earning her own money. After she joined one of Strømme
“Learning how to master a dugout canoe requires you to go through a long apprenticeship” Mariam smiles. “You have to understand the watercourse. There are rocks that emerge during the low water season and you have to make sure that the boat stays on the right course. You must avoid risks and stay calm! It can be dangerous.” Sailing a pirogue is both mentally and physically exhausting. Mariam has learnt to read the fluvial environment of the river Niger and anticipate the different movements of the water. She watches with precision the loading of her boat, ensuring the passengers and cargo are stable and well-balanced. With this job, Mariam and her family’s life has now also found a new balance and harmony.
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Report from the Strømme Foundation Board of Directors for 2017
Strømme Foundation (SF) works to enable people to overcome the root causes of poverty. SF’s identity is based on Christian values as they are expressed in the life and teachings of Jesus Christ. SF wants to play a catalytic role in enabling marginalised groups to meet their basic needs themselves and gain access to resources and decision-making levels. Thus, SF works to promote a more just society. SF has its coordination/facilitation office in Norway (Kristiansand) and four regional offices in West Africa (Mali); East Africa (Uganda); South America (Peru) and Asia (Sri Lanka), plus six country offices in South Sudan, Bangladesh, Nepal, Myanmar, Burkina Faso and Niger. The Board The Board has had four ordinary and one extraordinary board meetings in 2017 and dealt with 47 issues. The Board members who served during 2017 were; Hans-Christian Vadseth (styreleder), Ingunn Folkestad Breistein (nestleder), Lars Saaghus, Anna Minj, Ansgar Gabrielsen. Substitute members were; Cecilie Wathne, Snorre Kjesbu og Jostein Senumstad. Strategy 2013-2018 SF’s mode of operation is unique in our combination of a decentralized structure and our partnership model, which ensures that the solutions to poverty are locally defined and always tailored to the local context. SF also seeks to strengthen civil society by facilitating our partner networks to influence government policies through conducting more direct advocacy work towards the Government(s), and building the capacity of partner organizations to undertake such advocacy in our intervention countries. SF also wants to carry out political lobbying, both internationally and in Norway, to fight poverty. To the greatest possible extent, SF seeks to raise funds that will increasingly facilitate a move from implementing single projects to a more integrated and long-term programme approach. This necessarily demands a thorough integration of funding in the programming work, and vice versa. SF evaluates the results against the strategy plan continuously, and started in 2017 the strategy planning for the next period.
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Activity One of the major focus areas for SF in 2017 was the Speed School programme in West Africa. This programme aims to prepare and transition out-of-school children into formal schools. During the year, SF successfully worked to both streamline and scale up the programme. In addition, SF has focused on transition of the concept to the local authorities. Thus, new funding contracts have been signed with national and international organisations, and an additional 42 MNOK was granted through the Norwegian Revised National Budget 2017. The fundraising activity was in 2017 high, for the first time passing 200 MNOK in incoming funds. Collected funds though are significantly higher than those shown in the accounts for public sector grants, corporate sector and grants from other organisations. Due to current accounting principles, these grants will first be recognised as income when consumed. With regards to fundraising, SF has continued to promote the “Job Creator” concept – a concept that has proved to be popular and well-received. In 2017 SF carried out a major digital campaign linked to the tv-series Motherhood, produced and launched by aftenposten.no.
Financial Headlines Strømme Foundation The total income in 2017 was 209.1 MNOK compared to 188.3 MNOK in 2016. Public sector income increased from 82.8 MNOK in 2016 to 103.6 MNOK in 2017, mainly due to increased support from EU, Norad and Forskningsrådet. Private donations have decreased from 64.2 MNOK in 2016 to 60.0 MNOK in 2017. Income from business partnerships shows a decrease from 16.6 MNOK in 2016 to 15.3 MNOK in 2017. Contributions from other organisations increased from 21.9 MNOK in 2016 to 29.4 MNOK in 2017. Financial support to purpose activity increased from 164.7 MNOK in 2016 to 192.3 MNOK in 2017. The result for the year
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after change in earmarked capital was a deficit of 8.0 MNOK, compared to a surplus of 10.6 MNOK in 2016. Other purpose capital in SF is now 67.5 MNOK compared to 75.5 MNOK in 2016. Consolidated Accounts There was a consolidated deficit of 6.9 MNOK compared to 0.9 MNOK in 2016. Total equity decreased from 252.7 MNOK in 2016 to 245.6 MNOK in 2017. The cash flow from operational activities is satisfactory. Total liquid funds at the year-end was 109.7 MNOK compared to 112.2 in 2016. This excludes Strømme Micro Finance AS (SMF AS) that has been consolidated using the equity method. Liquid funds in SMF AS group totals 42.5 MNOK. The key figures for SF as a percentage of total costs in 2017 were: Administration 3.2 % (3.9 % in 2016); Fundraising 9.5 % (10.0 % in 2016); and Purpose 87.3 % (86.1 % in 2016). In addition, the Norwegian Fundraising Control Board has introduced a measure of the amount of private funding that goes to purpose costs which is 73.7 % (78.2 % in 2016). SF is following the guidelines given from the Norwegian Control Committee for Fundraising regarding definitions of administration, fundraising and purpose. Working environment and staff The working environment in the SF is considered good. The cooperation with the employees’ unions has been constructive and has contributed positively to the development work. In 2017 there were 3 men and 2 women on the Board compared to respectively 5 and 2 in 2016. Among the employees in the Kristiansand office at the end of the year, there were 16 women and 14 men compared to 16 and 18 in 2016. The average man-years diminished from 30.5 in 2016 to 29.1 in 2017. In the regional offices, there were 33 women and 94 men, compared to 35 and 89 in 2016. For the Group as a whole, there were 54 women and 120 men employed, compared to 57 and 118 in 2016. On the leadership team, comprising the senior managers in the Kristiansand office plus the regional directors, there were 5 women and 3 men. SF strives for a balance of
gender at all levels and is conscious about this when employing new staff. Absence due to illness in the Kristiansand office was approximately 2.9 % (2.1 % in 2016) of the total working time. The organisation has a company health service agreement. There were no serious accidents at work resulting in material damages or personal injuries during the year. Every second year, a work environment survey is carried out in SF, which includes the Kristiansand office and the regions. In 2016 SF was included in the pilot project “Likestilt Arbeidsliv” in Agder. This is a project that aims at certifying participants as a diverse and equal workplace during the spring of 2018. Strømme Foundation has an international HR Policy that intend to ensure that there is no discrimination on the grounds of ethnicity, nationality, sexual orientation, political affiliation, age and/or religion. The organisation’s pollution of the external environment will mostly be of an indirect nature. The Board considers SF to have a minimal pollution effect on the external environment. The organisation has no orders from the public authorities that has not been complied with. Risk Perspective The Board continues to monitor SF’s risk through quarterly reporting. Focus on this has continued during 2017 on deviation reporting to the Board and on preventing corruption in SF and its partners. The organisation has established good systems and had good dialogue with donors when suspected corruption cases are uncovered. The security situation has been challenging in Burkina Faso, Mali, Niger, Bangladesh and South Sudan in 2017. In the northern part of Mali, it has not been possible for staff to travel due to the security situation. Still it has been possible to work with partners in the different areas as planned. The regional office in West Africa is well updated on the security situation in all three countries and makes good and safe plans for both local and Kristiansand staff traveling in the region. The Norwegian Government’s presence in West Africa has been enforced by the opening of the Norwegian Embassy in Bamako.
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For South Sudan, the political situation is still challenging and has continued to worsen in 2017. This has affected the planned activities and some projects are delayed. The Juba office is well updated and are in close contact with local partners, the Norwegian Embassy and UN organisations on security matters. It has been challenging for Kristiansand staff to travel to the region in 2017. In Bangladesh and Myanmar, the political situation maintained tense in 2017 due to the refugee crisis. This has affected the activity to some extent, but the country office still managed to carry out most of the planned activity. SF operates in countries, which are occasionally affected by natural disasters. In 2017 we experienced floods and landslides in Asia. Some funds were spent to help some of our partners in the affected areas. SF experienced no casualties or injuries related to staff or their families during these incidents. SF’s 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 can deliver to partners in the South. However, given the nature of SF’s agreements with these partners, our exposure is limited to the Norwegian kroner budget. In 2017 SF has entered into fixed exchange rate contracts to secure the budgets at a favourable exchange rate between the Norwegian kroner and the US dollar and Euro. Strømme Foundation has no external debt. Thus, there will be no serious consequences for the organisation if the interest rates should increase considerably. The credit risk is restricted to the microfinance operations of SMF AS.
risk. Due to the monitoring system and diversification of the portfolio, the Board is confident that the credit risk is reduced to an acceptable and manageable level. The specific country risk cannot be influenced directly by the company, but the sum of country risks has been reduced through the company’s strategic decision to spread its activities over several countries. Future Perspective SF has clear plans to continue its work of empowering poor communities to climb the ladder out of poverty. The need is clear and urgent, and the organisation is in a good position to make a substantial impact. SF wishes to focus geographically to enforce the impact in some countries and will therefore withdraw from other countries. The withdrawal of SFs presence will be done in a slow pace, and the partners will continue the work. The Board has good reason to believe that Strømme Foundation is a sound and well-working NGO with a long potential life-span. The results from 2017 show steady growth in regular income. 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. Allocation of the result Out of SF’s overall deficit of 8.9 MNOK, 0.9 MNOK is transferred from the restricted purpose capital, and 8.0 MNOK is taken from other purpose capital. The consolidated accounts show a net deficit of 6.9 MNOK, of which 1.1 MNOK is transferred to restricted purpose capital and 8.0 m NOK is taken from other purpose capital.
Microfinance operations are exposed to credit risk and country
Kristiansand, June 8 2018
Arvid Grundekjøn Board Member
Nyaradzayi Gumbonzvanda Board Member
Hans Christian Vadseth Chairperson of the Board
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Ingunn Folkestad Breistein Board Member
Lars Saaghus Board Member
Snorre Kjesbu Board Member
Idunn Helle Board Member
Kristine S. Sødal Secretary General
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Strømme Foundation Activity Account Note
Funds acquired
Strømme Foundation 2017
Strømme Foundation 2016
Consolidated 2017
Consolidated 2016
Note
Public sector grants 3 103 552 690 82 834 592 103 552 690 82 887 092 Grants from other organisations 4 29 353 115 21 934 008 29 353 115 21 934 008 Private donations 5 59 984 410 64 239 065 59 984 410 64 239 065 Corporate sector 6 15 318 521 16 622 300 15 318 521 16 622 300 Financial income 7 -84 311 1 457 980 -84 311 1 448 992 Other income 978 002 1 172 697 978 002 1 172 697 Total funds acquired 209 102 427 188 260 640 209 102 427 188 304 152
Funds spent
Cost of fund acquisition Direct fundraising cost 8 -17 502 606 -15 568 205 -17 502 606 -15 568 205 Other fundraising cost 8 -3 361 631 -3 485 005 -3 361 631 -3 602 404 Total cost of fund acquisition 1 -20 864 237 -19 053 210 -20 864 237 -19 170 609 Purpose cost Support to development partners/projects 9 -139 317 454 -115 106 659 -139 317 454 -113 987 066 Natural Disasters response 10 -2 084 367 -2 528 356 -2 084 367 -2 528 356 Programme follow-up at regional offices 11 -35 198 147 -29 560 655 -35 198 147 -29 560 655 Programme follow-up from Kristiansand 12 -10 713 431 -10 678 564 -10 713 431 -10 913 362 Information and public education 13 -4 983 999 -6 850 195 -4 983 999 -6 850 195 Total purpose cost 1 -192 297 399 -164 724 430 -192 297 399 -163 839 635 30 Administration cost 1 -7 038 642 -7 449 088 -7 038 642 -7 566 487 Total funds spent 1, 25 -220 200 277 -191 226 728 -220 200 277 -190 576 731 VAT compensation 14 2 219 520 2 335 097 2 219 520 2 335 097 Result Microfinance (MF) 2 327 211 -470 214 Result from investments in other companies -349 209 -503 936
The year’s activity result
-8 878 330 -630 991 -6 900 328 -911 632 32 Hereof minorities’ share (Mimeta) - -145 984 Additions/reductions in purpose capital Change in purpose capital with restrictions (SF, other companies) 15B -868 765 -11 271 281 -1 217 974 -12 201 301 Change in purpose capital with restrictions (Microfinance) - - 2 327 211 649 379 Transferred to / (from) other purpose capital -8 009 565 10 640 290 -8 009 565 10 640 290 Total additions/reductions in purpose capital 15 -8 878 330 -630 991 -6 900 328 -911 632 32
Strømme Foundation Balance Sheet as of 31.12 ASSETS
Note
Strømme Foundation 2017
Strømme Foundation 2016
Consolidated 2017
Consolidated 2016
Note
Long-term assets Fixed assets Property 16 6 834 589 7 139 221 6 834 589 7 139 221 Office furniture and equipment 16 195 202 216 201 195 202 216 201 Total fixed assets 7 029 791 7 355 422 7 029 791 7 355 422 Financial assets Investments in subsidiaries 17 37 329 847 37 329 847 - - Investmens in other companies 18 200 000 705 000 863 483 1 125 155 Investments in microfinance - - 171 007 390 177 019 315 31 Loan to subsidiaries 19 72 210 100 75 316 208 - - Overfinanced pension schemes 22 917 176 490 861 917 176 490 861 Long-term receivables 19 5 050 000 5 414 935 5 050 000 5 414 935 Total financial assets 115 707 123 119 256 851 177 838 048 184 050 265 Total long-term assets 122 736 913 126 612 273 184 867 839 191 405 687 Receivables Trade Debtors 19 592 513 995 260 592 513 995 260 Inter-company receivables 19 1 064 013 713 428 - - Other short-term receivables 23 6 736 225 3 766 371 6 736 225 3 766 371 Total receivables 8 392 751 5 475 059 7 328 738 4 761 631 Investments in current financial assets 20 31 574 540 26 389 422 31 574 540 26 389 422 Bank and cash 21 78 170 040 85 850 337 78 170 040 85 850 337 Total current assets 118 137 330 117 714 818 117 073 317 117 001 390 TOTAL ASSETS 240 874 243 244 327 090 301 941 156 308 407 077
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Strømme Foundation Balance Sheet as of 31.12 PURPOSE CAPITAL AND LIABILITY
Note
Strømme Foundation 2017
Strømme Foundation 2016
Consolidated 2017
Consolidated 2016
Note
Purpose capital (PC) Founding capital 3 326 092 3 326 092 3 326 092 3 326 092 Acquired purpose capital PC with restrictions (SF projects) 15 B 4 910 378 5 779 143 4 910 378 5 779 143 PC with restrictions (Microfinance) 15 106 882 512 106 882 512 134 094 385 136 765 442 Other purpose capital 15 67 543 173 75 552 738 103 221 982 106 863 160 Total acquired purpose capital 179 336 063 188 214 393 242 226 745 249 407 745 Total purpose capital 15 182 662 155 191 540 485 245 552 837 252 733 837 Liability Long-term debt Pension obligations 22 - - - Staff gratuities in regional offices 24 7 432 938 6 338 715 7 432 938 6 338 715 Legacy obligations 150 000 150 000 150 000 150 000 Other long-term debt - - - 4 125 060 Total long-term debt 7 582 938 6 488 715 7 582 938 10 613 775 Short-term debt Creditors 6 013 480 4 320 354 6 013 480 4 320 354 Public duties and taxes 2 207 891 2 320 532 2 207 891 2 320 532 Owed to employees 2 417 187 2 040 067 2 417 187 2 040 067 Inter-company debt 19 1 823 769 1 238 425 - Deferred project income 3, 4, 6 37 234 430 34 503 264 37 234 430 34 503 264 Other account payable 932 394 1 875 248 932 394 1 875 248 Total current liability 50 629 151 46 297 890 48 805 381 45 059 464 Total liability 58 212 088 52 786 605 56 388 319 55 673 239 TOTAL PURPOSE CAPITAL AND LIABILITY 240 874 243 244 327 090 301 941 156 308 407 076
Kristiansand, June 8 2018
Hans Christian Vadseth Chairperson of the Board
Arvid Grundekjøn Board Member
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Nyaradzayi Gumbonzvanda Board Member
Ingunn Folkestad Breistein Board Member
Lars Saaghus Board Member
Snorre Kjesbu Board Member
Idunn Helle Board Member
Kristine S. Sødal Secretary General
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Strømme Foundation Cashflow 2017 (The indirect method) Note
Strømme Foundation 2017
Strømme Foundation 2016
Consolidated 2017
Consolidated 2016
The year’s activity result -8 878 330 -630 991 -6 900 328 -911 632 Adjustment of microfinance group - - 1 013 656 1 641 372 Share of result from other companies - - 349 209 503 936 Ordinary depreciation and write offs 16 322 633 403 057 322 633 403 057 Loss/Gain from disposal of investments 17 -495 000 -8 988 -495 000 Difference between pension cost and payments 22 -426 315 -491 701 -426 315 -491 701
Posts in the activity account without liquidity effect -598 682 -97 632 -249 473 415 292 Proceeds from sale of fixed assets 16 3 000 2 600 3 000 2 600 Proceeds from sale of subsidiaries 17 1 000 000 138 988 1 000 000 -71 022 Change in loan to subsidiary 19 3 106 108 1 500 000 - Change in long-term receivables 19 364 935 -5 414 935 364 935 -5 414 935 Change in long-term debt 1 094 222 831 724 1 094 222 831 724 Investments, disposals and financing 5 568 265 -2 941 623 2 462 157 -4 651 633 Change in receivables / other current assets -2 917 693 4 601 459 -2 567 107 3 999 374 Change in creditors / other short-term debt 1 600 094 3 692 067 1 014 751 3 344 595 Change in deferred project income 3, 4, 6, 23 2 731 167 32 691 124 2 731 161 32 460 420 Other changes 1 413 568 40 984 650 1 178 805 39 804 388 Total changes in liquidity during the year -2 495 180 37 314 404 -2 495 180 36 297 790 Opening balance of cash and current financial assets 1.1. 112 239 759 74 925 355 112 239 759 75 941 969
Closing balance of cash and current financial assets 31.12 109 744 580 112 239 759 109 744 579 112 239 759 Specification: Investment in current financial assets 20 31 574 540 26 389 422 31 574 540 26 389 422 Bank and cash 21 78 170 040 85 850 337 78 170 040 85 850 337 Closing balance of cash and current financial assets 31.12 109 744 579 112 239 759 109 744 579 112 239 759
Accounting Principles applied 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”, 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 is meant to give the reader a better understanding of how Strømme Foundation has used the resources at its disposal. SF is not liable for direct taxation.
Allocation of costs
THE PURPOSE OF STRØMME FOUNDATION IS TO LIFT PEOPLE OUT OF POVERTY BY: Managing raised funds and public grants in a way that ensures that recipients gain real influence over their own situations through participation in the developmental process, to strengthen human dignity, and to stimulate the ability of recipients to help themselves. Engaging in dissemination and awareness activities from a North-South perspective, with the aim to create increased interest in development through co-operation; and Providing aid and assistance through local partner organisations, and other regional organisations in co-operation with local authorities. THE REGIONAL OFFICES SF has four regional offices; in West Africa (Mali); East Africa (Uganda); South America (Peru) and Asia (Sri Lanka), plus six country offices in Burkina Faso, Niger, South Sudan, Bangladesh, Nepal and Myanmar. The full cost of these offices is allocated as purpose cost.
UPPORT FOR DEVELOPMENT PROGRAMMES FROM S KRISTIANSAND Costs of the “International Department” are allocated to activity and thereby purpose costs. The department’s function is to co-ordinate, support, evaluate and monitor all programme work, as well as liasing with public and institutional funding bodies such as NORAD, The Norwegian Peace Corps, Operation Day’s work, Läkarmissionen and Eriks Foundation. OTHER SUPPORT FUNCTIONS IN KRISTIANSAND These consist of the ‘Secretary General’, the Administration, Finance and ICT departments. The basis of allocation starts with salaries, which are allocated according to an estimate of the amount of time spent on different activities. Costs that cannot be reasonably and consistently allocated to activity, are classified as administration costs. Thus, support costs relating to the Board of SF, audit costs, general memberships, consultancy, finance costs and about 60 % of staff costs in the administration and finance departments are classified as administration costs. Note 1 below shows in summary how the allocation has been made. FUNDRAISING AND INFORMATION ACTIVITIES All expenditure directly connected to personnel employed as fundraisers, and to solely fundraising activity, is classified 100 % as fundraising cost. This includes all direct marketing costs and other costs associated with our main fundraising products “Friend at Heart”, “Bridge-builder”, “Poverty-fighter” and “Job Creator”. Efforts to raise funds from other organisations are also included here. All expenditure on personnel and activity whose prime purpose is connected to information and public education is allocated to purpose activity. TRANSACTIONS IN FOREIGN CURRENCY The conversion of the regional accounts from local currency to Norwegian kroner follows the prevailing exchange rates that are monthly updated in the common financial system. Accounting summaries from the offices still on separate financial system is recorded in Kristiansand monthly at rates corresponding to the fund transfer rates from here or the rates of institutional grants received in the regions.
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SF enters into forward exchange contracts in foreign currency to reduce the currency exposure connected to money transfers abroad. The currency hedging is classified as securing of cash flow according to the NRS 18 “Financial assets and obligations”. Gain and loss related to forward exchange contracts are recorded directly under financial posts relative to the market rate at the settlement date. These exchange rates serve as basis for the transfers to the regions and therefore affect programme costs in the activity accounts. Foreign currency income is in general 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 special guidelines concerning earmarked funds, which ensures that these funds cannot be used for activities other than those for which they were donated without specific approval. The Board has set regulations for the handling of earmarked funds when a project is closed. Unused earmarked funds are shown as purpose capital with restrictions on the balance sheet. Grants that are not spent by the end of the year are not shown as income, but as short-term debt in the accounts.
SHORT-TERM INVESTMENTS Short-term investments (shares- and bonds 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 For the time being, the Foundation has both a defined benefit and a defined deposit pension scheme. Defined benefit pension 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 on 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 shown as financial asset. Defined deposit pension The payments to the insurance company are calculated as a fixed percentage of the members’ salaries. The deposits are accounted for as personnel cost. The Foundation has no obligations beyond the annual payments. CASH FLOW Current assets and short-term liabilities contain items due for payment within The cash flow is calculated using the indirect method. Cash and cash equivalents one year after acquisition. Other items are classified as fixed / financial assets or consist of cash, bank deposits and other short term liquid investments which long-term liabilities. can immediately be converted to cash without material exchange risk. Current assets are valued at the lowest of procurement cost and actual value. CONSOLIDATION PRINCIPLES Other accounts receivable are included on the balance sheet at face value. Items The consolidated accounts includes those companies where Strømme Foundain foreign currency are valued at year-end exchange rates. Short-term liabilities tion directly or indirectly has deciding influence. The consolidated accounts are are recorded at the nominal amount at the time of accrual. prepared as if the group were one economic unit. Transactions and outstanding balances between the companies in the group are eliminated. The consolidated Fixed / financial assets are valued at procurement cost, but are depreciated to accounts are prepared according to uniform principles. Purchased subsidiaractual value if the fall in value is not expected to be temporary. Long-term debt ies are accounted for in the consolidated accounts based on SF’s procurement is entered at the nominal amount at the time of establishment. costs. The costs of acquisition are linked to identifiable assets and debt in the subsidiary, which is stated at actual value in the consolidated accounts at the FIXED ASSETS time of purchase. The fixed assets are entered in the balance sheet and depreciated over their life span if the life span is more than 3 years and the cost is higher than NOK 50 000. Investments in microfinance are valued according to the equity method in the Maintenance of fixed assets is charged to operating costs, while renovation or consolidated accounts. The equity method requires that a proportion of the upgrading is added to the cost value and is depreciated along with the asset. relevant companies’ result, reduced by depreciation on possible excess values, is charged to the activity account in the consolidated accounts. Both the purpose At the regional offices all fixed assets are charged to result at the time of capital and the mother company’s lending to the microfinance activity are procurement. incorporated in the account line ‘Investments in microfinance’. All leasing contracts are classified as operational and accounted for as costs. Minority interests are shown as a separate post under the purpose capital. This means that assets and debt are stated inclusive of the minorities’ share. In the SHARES IN SUBSIDIARIES AND OTHER COMPANIES activity account, the minorities’ share of the result is calculated. Shares in subsidiaries and other companies are recorded at historic cost. Note 1 – PRINCIPLES FOR ALLOCATING COSTS Department Total Administration Fundraising Purpose Comments/Allocations basis General Secretariat, Administration, Finance & ICT 12 999 818 5 501 187 2 606 138 4 892 492 Some direct allocation to admin, rest allocated on KRS office salary basis Communication/Marketing 23 045 562 1 537 454 17 502 606 4 005 501 Allocation on the basis of activity International Department 7 554 930 - 755 493 6 799 437 Generally all purpose activities, apart from some major donors’ fundraising cost Transfers to development projects, regional offices and partners 176 599 968 - - 176 599 968 All activity outside Norway and with external partners is defined as purpose. Total 220 200 277 7 038 642 20 864 237 192 297 399
Classification and valuation of balance sheet items
Notes for 2017
NOTE 2 – KEY INDICATORS 2017 2016 2015 2014 2013 Percentage spent on purpose 87,3 % 86,1 % 85,4 % 83,4 % 82,6 % Percentage spent on administration 3,2 % 3,9 % 4,5 % 4,6 % 5,3 % Fundraising percentage 73,7 % 78,2 % 75,4 % 73,6 % 76,7 %
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T he percentage spent on purpose shows how much of the total expenditure has gone to fulfilling Strømme Foundation’s various purposes. The percentage spent on administration shows the share of the total expenditure that was covering unallocated administrative costs (general admin, accounts, ICT, audit, Board/Council expenses). The fundraising percentage shows how much of the money SF raises from private donors that goes to purpose costs, after the cost of raising the funds is deducted. Public sector grants, grants from foreign organisations, financial income and other income are excluded from the calculation. The criteria for continued membership in the Norwegian fundraisers’ register is that a minimum of 65 % of the funds raised is used on the organisation’s purpose over time. NOTE 3 – PUBLIC SECTOR GRANTS Strømme Foundation has a five year co-operation agreement with the Norwegian Agency for Development Co-operation (NORAD) for expected annual support of NOK 57 mill that expires in 2018. In excess of this, we received grants for education in vulnerable states and for Speed Schools in West Africa. The contribution from UK Aid on the five year agreement from 2013 to provide education for girls in South Sudan and a similar agreement that covers both Uganda and South Sudan was extensive also in 2017. The large three-year contract on Speed Schools with The European Union in Mali is in full operation. New agreements with The Nordic Development Fund and The Norwegian Research Council have been signed in 2017. Donor Purpose 2017 2016 NORAD Development Programmes 58 783 647 55 932 292 NORAD Teacher Education, South Sudan 3 502 564 -486 337 NORAD Secretariat for Speed Schools, West Africa 2 186 226 2 321 927 NORAD Education in vulnerable states, Mali 3 366 196 1 572 751 NORAD Education in vulnerable states, South Sudan 1 634 614 21 818 NORAD Speed School Programme – Mali, Niger, Burkina Faso 5 263 540 - Swiss Agency for Development & Coop. (SDC) Speed School Programme – Mali - 128 794 The European Union, EU Speed School Programme – Mali 11 208 132 9 871 990 The European Union, EU Education for girls, South Sudan 407 876 - The Norwegian Peace Corps – Young Act Now Programme - Hald International Centre 1 638 000 2 371 560 The Norwegian Peace Corps (FK) South/South Exchange Programme - East Africa 1 367 202 1 236 556 The Norwegian Peace Corps (FK) Exchange programme, HTPV – South Sudan - -46 981 UK Aid Education for girls, South Sudan 8 844 865 7 979 435 UK Aid Education for girls, Uganda/South Sudan 1 010 307 1 849 317 The Nordic Development Fund (NDF) Climate mitigation/Food security, Uganda 1 010 163 - The Norwegian Research Council (FR) Research on Speed School programme, Niger 3 329 358 - US Aid Hydroponic Green Forage, Peru - 81 470 Total 103 552 690 82 834 592 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. The co-operation agreement with NORAD requires a self contribution of minimum 10 %, and allows up to 7 % administration support. For programmes financed by public sector donors like FK, EU, UK Aid, NDF and FR there are certain funds for programme follow-up included in the budget. Grants that were unspent by the end of the year have been periodised, which means that these are not included as income. A total of NOK 25.0 mill have been shown as ‘Deferred project income’ on the balance sheet. NOTE 4 – CONTRIBUTIONS FROM OTHER ORGANISATIONS Donor Purpose 2017 2016 Operation Day’s Work, Norway Empower girls to become masters of their own life, Nepal 3 992 700 6 601 821 Läkarmissionen, Sweden Saving-/credit groups and youth empowerment, Uganda 2 237 783 1 234 280 Läkarmissionen, Sweden Saving-/credit groups and literacy programme, South Sudan 494 981 493 957 Läkarmissionen, Sweden Literacy programme for women, Niger 771 564 -170 534 Eriks Foundation, Sweden Speed Schools, Mali 3 017 946 1 507 440 Eriks Foundation, Sweden DREAM program, Myanmar 2 047 160 684 880 Eriks Foundation, Sweden Education and community development, Bangladesh 2 159 930 1 966 162 Eriks Foundation, Sweden Local community Development, South Sudan 1 859 860 3 079 791 Education for All Foundation, Qatar Speed Schools, Mali, Burkina Faso, Niger 10 528 574 4 647 312 Turing Foundation, The Netherlands Speed Schools, Niger 136 000 -136 000 Hei Verden, Norway Inclusive Education, Bangladesh 675 242 433 682 Waterloo Foundation, England Literacy programme for women, Burkina Faso 264 327 591 272 Futuro Bolivia, Norway Occupational training for women, Bolivia 115 200 115 200 TearFund, Switzerland Programme follow-up of Peruvian partners 208 849 209 388 Bernhard van Leer Foundation, The Netherlands Safe families and protected childhood, Peru 643 000 69 796 Strømme Microfinance, Norway Research on saving-/credit groups, Uganda 200 000 - Eriks Foundation, Sweden Flood rehabilitation, Myanmar - 354 104 Eriks Foundation, Sweden Food security in drought areas, Uganda - 48 168 Läkarmissionen, Sweden Inter-faith dialogue forum, Niger - 137 898 L’Albero della Vita Onlus Foundation, Peru Programme follow-up of Peruvian partners - 65 392 Total 29 353 115 21 934 008 The Samvad programme in Nepal, financed by Operation Day’s Work, was completed in 2017. The Eriks Foundation’s support for Speed Schools in Mali was resumed as co-funding towards a large, five-year agreement with the Education for All Foundation in co-operation with PLAN in Mali, Burkina Faso and Niger for Speed Schools. The programmes in Bangladesh and South Sudan with Eriks Foundation continued as per contract along with an increased programme activity in Myanmar. Läkarmissionen contributed considerably to the work in East Africa and Niger. Total grants from other organisation that are periodised by end of the year are NOK 4.4 mill. NOTE 5 - PRIVATE DONATIONS Donor Category 2017 2016 Individual donations 9 439 273 8 102 262 Fixed-term donations (Friend at Heart, Bridge Builder, Job Creator etc.) 41 270 629 40 741 333 Events, schools and artists 6 415 604 3 873 522 Testamentary donations 2 629 853 11 518 298 Gifts for Natural Disasters aid 229 052 3 650 Total 59 984 410 64 239 065
NOTE 6 - CORPORATE SECTOR This income comes from our co-operation with the corporate sector and sports clubs. We define the co-operation in three categories. A ”Main partner” contributes NOK 500 000 or more, a ”Plus partner” between 100 000 and 499 000 and a ”Partner” from 15 000 to 99 000. In 2017 we had four main partners: Agder Energi, Skagerak Energi, The Kavli Trust and AKO Foundation. Their accumulated donations comprise NOK 11.8 mill. Our largest sports co-operation partner is IK Start through
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their organisation Start Life Support. A total of NOK 7.9 mill in contributions were periodised and are included under ‘Deferred project income’ on the balance sheet. NOTE 7 – FINANCIAL INCOME/COST 2017 2016 Other interest income 504 893 572 656 Other financial income 1 584 348 2 378 189 Other financial cost -2 173 551 -1 492 865 Total -84 311 1 457 980 Exchange differences occur continously during the year after the resumption of the common financial system together with Kristiansand office at the East Africa and Asia offices. Custodies in foreign currency at balance sheet date are converted at the average bid rate stated by the currency exchange provider Oanda. Net exchange gain/(loss) in the regions is included under ‘Other financial income/(cost)’. Net gain on forward exchange contracts is included under ‘Other financial income’ - see Note 28. The same is pertaining to gain from the sale of shares in Luntevika Eiendom AS - see Note 18. NOTE 8 – FUNDRAISING COSTS The costs of fundraising in the Norwegian private market are shown here, both the direct costs and the indirect support costs allocated to fundraising. Indirect costs are shown under ‘Other fundraising costs’ in the accounts, and this also includes costs in Norway of securing funds from other organisations. NOTE 9 - SUPPORT TO DEVELOPMENT PARTNERS/PROJECTS Direct costs on behalf of the partners/projects are included here, in addition to transfers to the partners/projects. Country/Region 2017 2016 Bangladesh 13 804 561 13 616 425 Sri Lanka 3 624 712 4 222 337 Nepal 11 523 208 11 071 289 Myanmar 2 706 575 1 289 610 Asia 31 659 056 30 199 661 Uganda 7 341 261 8 899 538 Tanzania 3 926 785 3 374 551 South Sudan 22 232 616 17 840 305 Kenya 3 177 125 3 710 075 East Africa 36 677 787 33 824 468 Mali 32 072 717 22 777 056 Burkina Faso 11 191 673 7 440 595 Niger 13 209 112 8 596 064 West Africa 56 473 503 38 813 715 Peru 4 757 775 4 580 994 Bolivia 5 242 258 4 822 569 South America 10 000 033 9 403 563 Act Now 1 657 308 2 337 222 Fafo - Vision 2030 2 439 550 - Peace Corps - FVTR/Myrada 410 218 528 030 Global 4 507 076 2 865 252 Total 139 317 454 115 106 659 In 2016, the Speed Schools concept in West Africa was scaled up as a result of new grant agreements with The European Union in Mali and The Education for All Foundation (Mali, Burkina Faso, and Niger). The efforts for teacher training and girls education in South Sudan are increased. NOTE 10 – NATURAL DISASTERS AID Country (cause) 2017 2016 Nepal (Earthquake) 821 802 1 506 014 Myanmar (Flood) - 884 296 Bangladesh (Flood) 747 866 56 898 Sri Lanka (Flood) 377 461 31 433 Uganda (Food security) 32 623 49 715 Peru (Landslides) 104 614 Totalt 2 084 367 2 528 356 The earthquake disaster in Nepal triggered the willingness of many donors to contribute, and long-term measures were launched in selected areas in order to improve the livelihoods of the inhabitants of the villages. In 2017 severe floods struck several countries were SF is active. NOTE 11 - PROGRAMME FOLLOW-UP AT REGIONAL OFFICES Region 2017 2016 Asia (Bangladesh, Sri Lanka, Nepal, Myanmar) 11 580 016 8 966 589 East Africa (Uganda, Tanzania, South Sudan, Kenya) 9 400 696 7 980 781 West Africa (Mali, Burkina Faso, Niger) 10 021 713 8 504 186 South America (Peru, Bolivia) 4 195 723 4 109 100 Total 35 198 147 29 560 655
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NOTE 12 - PROGRAMME FOLLOW-UP FROM KRISTIANSAND Department 2017 2016 International Department 6 799 437 6 531 434 Shared support services 3 913 994 4 147 130 Totalt 10 713 431 10 678 564
NOTE 13 – INFORMATION AND PUBLIC EDUCATION WORK The communication department has two purposes: fundraising, and information and public education work. In addition to reports from the projects in the South to donors through our magazine Help for Selfhelp, this part of our work includes activities particularly targeted towards schools, the corporate sector, the press, and social media. The primary focus is on development issues rather than fundraising. Norad did not provide grant for information work for 2017. NOTE 14 – VAT COMPENSATION The current legislation relating to VAT provides a facility for voluntary organisations to apply in arrears for compensation of VAT paid. Received VAT compensation in 2017 is based on the total funds spent in 2016, and is recorded as income in the accounts, but stated on a separate line as extraordinary supply of funds in the activity account. No claim of outstanding VAT is recorded in the balance sheet for 2017. The accounts are charged inclusive of VAT, and compensation for VAT will be recorded as income in 2018. NOTE 15 - CHANGES IN PURPOSE CAPITAL (PC) Strømme Foundation 31/12/16 Change during 2017 31/12/17 Founding Capital 3 326 092 - 3 326 092 PC with restrictions (SF projects) 5 779 143 -868 765 See specification in Note 15B 4 910 378 PC with restrictions (Microfinance) 106 882 512 - 106 882 512 Other purpose capital 75 552 738 -8 009 565 Result for SF 2017 67 543 173 Total Purpose Capital 191 540 485 -8 878 330 182 662 155 NOTE 15 B - CHANGE IN PURPOSE CAPITAL WITH RESTRICTIONS Region 2017 2016 Change 2017/2016 Change 2016/2015 Asia 378 877 663 367 -284 490 -1 754 006 East Africa 4 413 977 4 392 030 21 947 -4 843 124 West Africa 117 524 - 117 524 -2 307 289 South America - - - -558 266 Global - 354 164 -354 164 -243 177 Natural disasters - 369 582 -369 582 -1 565 418 Totalt 4 910 378 5 779 143 -868 765 -11 271 281 Grants from the public sector and other organisations that were not utilised by the end of the year, are taken out of PC with restrictions and shown as debt in the accounts. This is also the case for opening balances that were still not spent. Therefore, remaining PC with restrictions now only contains private donations that do not have any agreement or expectation of repayment connected to them. NOTE 16 – FIXED ASSETS Property Business Premises Furniture and equipment Total Cost price 01/01 290 000 14 776 793 2 157 775 16 508 449 Acquisitions 2017 - - - Disposals 2017 - 3000 3000 Cost price 31/12 290 000 14 776 793 1 438 656 16 505 449 Accumulated depreciation 31/12 - 8 232 204 1 243 454 9 475 658 Book value 31/12 290 000 6 544 589 195 202 7 029 791 The year’s ordinary depreciation - 304 633 18 000 322 633 Depreciation rates - 2-10 % 20-30% Strømme Micro Finance AS (SMF AS) is titleholder for the building site and business premises, with exception of one unit for which SF is the titleholder. SF has a credit line of NOK 24 mill for foreign exchange hedging. This is secured on the total property value NOK 6.8 mill. Since SF operates with an accounting principle to expense all equipment under NOK 50 000, the majority of the inventory is not included under fixed assets on the balance sheet. For the same reason, most fully depreciated assets do not appear here. All equipment in the Regional Offices is recorded as programme follow-up cost. NOTE 17 - INVESTMENTS IN SUBSIDIARIES Name Number Owner share Book value in SF Result 2017 Equity 31/12/17 Strømme Micro-finance AS 10 500 100 37 329 847 -1 303 967 84 683 798 Total investments in subsidiaries 37 329 847 -1 303 967 84 683 798 Strømme Micro Finance AS (SMF AS), with its main office in Kristiansand, is a wholly-owned subsidiary of SF. The company conducts the microfinance activities on behalf of SF and submits its own annual report. NOTE 18 - INVESTMENTS IN OTHER COMPANIES Name Number Owner share Book value in SF Result 2017 Equity 31/12/17 Hald Internasjonale Senter SA 200 33 200 000 -792 946 2 601 614 Total investments in other companies 200 000 -792 946 2 601 614 The joint venture Hald International Centre (Hald) has its office in Mandal, and is owned with equal shares by The Norwegian Mission Society, The Norwegion Christian Student and Schools Movement, and Strømme Foundation. The objective of Hald is to provide courses and training for work within mission organisations, evangelisation and development work, as well as for exchange programmes in different parts of the world. Hald is a Not-for-Profit organisation and cannot give dividends to the owners. Hald is responsible for the Peace Corps 2017 grant of NOK 1.6 mill for SF’s exchange programme, Act Now. 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 1 7
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In May 2017 SF sold its 50 % share in Luntevika Eiendom AS, which has its office in Kristiansand, to the co-owner Kaspar Strømme Eiendom AS. The company is established for facilitating the commercial sale of residential housing on a property in Luntevika, Lillesand which SF inherited in 2002. NOTE 19 – OUTSTANDING WITH SUBSIDIARIES AND OTHER COMPANIES The ‘Loans to subsidiaries’ consists of interest-free subordinated loans to Strømme Micro Finance AS of NOK 72.2 mill with no repayment schedule. Long-term receivables consists of a seller’s credit to Luntevika Eiendom AS of NOK 5.1 mill, which matures as per specific agreement. This is secured by a guarantee of NOK 5.1 mill. from the owner of the company. Remaining inter-company receivables and debt pr. 31/12/17 is mainly related to the microfinance operation. NOTE 20 - INVESTMENTS IN CURRENT FINANCIAL ASSETS
Category Cost Price Disposals Book value Additions Change in Book value Market value 01/01/17 2017 01/01/17 2017 write offs 31/12/17 31/12/17 Market-based equity funds Primary Capital certificates Market-based bonds Market-based interest funds Total
15 410 664
15 410 664
69 223
0
0
15 479 886
18 748 720
953 436
953 436
0
0
0
953 436
1 482 055
10 025 322
10 025 322
10 015 893
-5 000 363
0
15 040 853
15 573 602
0 26 389 422
0 26 389 422
100 947 10 186 063
0 -5 000 363
-583 -583
100 364 31 574 540
100 364 35 904 741
NOTE 21 - LIQUIDITY AND RESTRICTED FUNDS 2017 2016 Free funds at Kristiansand office 29 206 504 45 385 037 Free funds at the regional offices 16 798 969 14 160 381 Sum free funds 46 005 473 59 545 418 Employees’ tax deducted account 745 166 797 637 Project/Grant accounts with restrictions 24 095 079 14 210 153 Memorial Fund 150 165 152 889 Restricted funds at the regional offices 7 174 157 11 144 241 Sum restricted funds 32 164 567 26 304 920 Total 78 170 040 85 850 337 NOTE 22 – PENSION OBLIGATIONS Employees who were 57 years and younger were from March 2015 moved from the defined benefit pension scheme (‘Ytelsespensjon’) to a defined deposit-based solution (‘Innskuddspensjon’). The old pension scheme is comparable to the State Pension Fund. At the start of 2017 there were 6 (7 in 2016) employees in the old pension scheme, while at the end of the year there were 5. For the 27 employees currently on the defined deposit pension scheme, there are no obligations beyond those paid during the year. Total cost related to the defined deposit-based pension scheme was NOK 1.1 mill in 2017. SF has signed an agreement for a new AFP-plan through the Common National scheme of AFP’s. Actuarial calculations have been applied for calculating the obligations and costs in connection with the defined benefit pension plans. The following assumptions have been used for the calculations: 2017 2016 Discounting rate 2,40 % 2,60 % Expected dividend 4,10 % 3,60 % Salary adjustments / year 2,50 % 2,50 % Yearly G-regulation / inflation 2,25 % 2,25 % Expected pension escalation 1,20 % 1,20 % Secured system 2017 Secured system 2016 Gross pension obligations at 31/12 calculated at 14 157 010 15 277 347 - Value of pension funds at 31/12 calculated at -13 928 520 -14 006 844 + Deferred obligation in case of (loss) / profit -1 032 326 -1 700 705 = Calculated net pension obligations as of 31/12 -803 836 -430 202 + Social Insurance contributions -113 341 -60 658 = Net pension obligation as of 31/12 -917 177 -490 860
The year’s pension accrual 199 755 273 111 + interest cost 387 763 366 354 + administration cost 171 392 179 661 - Return on capital -500 727 -395 179 = Net pension cost 258 183 423 947 + Social Insurance contributions 36 404 59 776 + Actuarial loss (gain) 80 829 176 683 = Total pension cost 375 416 660 406 The amount is included in “Salaries and personnel expenses” in the accounts. (Note 26). Actual yield on the pension funds was 4.7 % in 2017 (4.36 % in 2016). NOTE 23 – OTHER SHORT-TERM RECEIVABLES The balance sheet post ‘Other short-term receivables’ contains periodised project income of NOK 4.8 mill.
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NOTE 24 – GRATUITY PAYMENTS AND OBLIGATIONS AT THE REGIONAL OFFICES t all the regional offices SF as well as the employees make regular deposits into public gratuity funds. These funds are not on the SF balance sheet. In addition to A that, in Asia and East Africa contributions are set aside for a final payment to employees when they leave, but employees are entitled to draw on it before leaving. In most cases both SF and the individual employee make contributions according to the local legislation. In West Africa there is a legal obligation to make a payment on termination, depending on the years of service, and this is partly accounted for. In South America there are no liabilities above the social security costs already accounted for. NOTE 25 - OPERATIONAL COSTS Even though SF does not present a traditional profit and loss account, the guidelines for charitable organisations require the disclosure of additional information that would be shown if the expenditure were categories by type and not activity. Notes 25, 26 and 27 contain such a breakdown. Note 2017 2016 Project transfers to local partners 112 349 337 94 279 734 Project costs on behalf of local partners 9 819 029 9 319 567 Salary and personnel costs Kristiansand 26 22 069 048 21 939 677 Salary and personnel costs in regions/external programmes 26 35 051 493 23 596 777 Travel costs Kristiansand 2 435 241 3 332 837 Travel costs inclusive of vehicles in regions/external programmes 7 420 282 5 172 935 Office, ICT, consultant and other operating costs in Kristiansand 9 432 728 10 317 371 Office, ICT, consultant and other operating costs in regions/external programmes 27 11 805 424 14 835 324 Fundraising campaigns Kristiansand 9 495 063 8 029 448 Depreciation and write offs in Kristiansand 322 633 403 057 Total operational cost 220 200 277 191 226 728 Several programmes with dedicated project teams have started up in the regions, and this together with the establishment of new offices explains the increase in ‘Salaries and personnel costs in regions/external programmes’. NOTE 26 – SALARIES AND PERSONNEL EXPENSES / OTHER ALLOWANCES 2017 2016 Salaries in Kristiansand 16 994 028 17 105 943 Social security payments 2 700 342 2 657 919 Pension costs 1 045 734 1 464 989 Other personnel costs 1 328 944 710 826 Sum salaries and personnel expenses in Kristiansand 22 069 048 21 939 677
Salaries and allowances at Regional Offices/external programmes 35 051 493 23 596 777 Total 57 120 541 45 536 454 The average number of employees in Kristiansand was 30.8 (32.3). This amounts to 29.1 man-labour years in 2017, compared to 30.5 in 2016. In the regional offices the average number of employees was 120.7 (102.6), equivalent to 120.3 man-labour years, compared to 101.7 in 2016. The total salary cost in 2017 for the Secretary General (SG) was NOK 800 693, other allowances NOK 8 541 and pension contributions NOK 69 383. The SG has no bonus scheme. In Norway, SF is obliged to have a pension scheme according to the Compulsory service pension Law. The existing pension schemes fulfils the Law requirement. For the defined benefit pension scheme - see Note 22. The Executive Board and Advisory Board members have received no remuneration other than actual travelling costs. With the exception of salaries and travel claims, there are no financial transactions with employees or connected persons in SF in Norway. Outstanding loans to employees in the Regional Offices totalled NOK 66 387 at the year end compared to NOK 133 015 at the end of 2016. These are included in ‘Other short-term receivables’ on the balance sheet. NOTE 27 – AUDIT FEES 2017 2016 Statutory Audit Fees - Norway 240 000 230 000 Technical support accounts - Norway 43 000 36 000 Other certification fees - Norway 126 000 176 500 Other services (legal fees) - Norway 45 350 174 000 Audit fees in the regions 488 693 425 661 The fees are stated exclusive of VAT. Total fees in 2017 to the group auditor in Kristiansand were NOK 454 350, while total fees to auditors of regional offices were NOK 488 693. NOTE 28 – CURRENCY HEDGING The net loss on currency contracts materialised in 2017 was NOK 0.5 mill. This is recognised under financial items. Total unrecognised gains in the period 2008 to 2014 was NOK 14.1 mill. At the end of the financial year, SF had forward currency contracts with a face value of USD 1.5 mill which all terminate in 2018. The handling of these contracts is shown in the accounting principles note. The real value of the contracts was NOK -0.4 mill at the end of year, which is not accounted for.
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Consolidated accounts (Strømme Foundation, SMF AS Group, Mimeta)
NOTE 29 – CONSOLIDATED SALARIES AND PERSONNEL EXPENSES / OTHER ALLOWANCES 2017 2016 Salaries in Kristiansand 18 181 370 18 470 569 Social Security 2 813 368 2 852 898 Pension costs 1 544 157 1 559 977 Other Personnel costs 722 794 731 756 Sum salaries and personnel costs in Kristiansand 23 261 689 23 615 201 Salaries and allowances in Regions / outside Norway 27 388 378 23 596 777 Total 50 650 067 47 211 978 Audit Fees (exclusive of VAT): Statutory Audit Fees - Norway 310 000 300 000 Technical support accounts - Norway 102 700 126 000 Other certification fees - Norway 126 000 272 700 Other services (legal fees) - Norway 45 650 483 050 Audit fees in the regions 774 108 623 180 Beyond Strømme Foundation, the table above includes figures for the Microfinance Group and Mimeta. In addition to the employees stated in Note 26, there are an additional 17 employees in the group, 2 of which are in Norway. The salary of the Secretary General is disclosed in Note 26. Audit fees paid to the group auditors in Norway in 2017 is NOK 584 350 exclusive of VAT. The audit fees in the regions totalled NOK 774 108. NOTE 30 – CONSOLIDATED PURPOSE ACTIVITIES The total purpose cost in the consolidated accounts are reduced by the total grants of NOK 0.0 mill (NOK 1.1 mill in 2016) that was provided by SF to the microfinance activity. These costs are in the consolidated accounts presented as part of “Result Microfinance”. NOTE 31 – INVESTMENTS IN MICROFINANCE SF has organized the microfinance activities through the subsidiary group SMF AS. In the consolidated accounts SMF AS is included according to the equity method. The year’s changes in the Microfinance investments: 2017 2016 Book value 01/01 177 019 315 182 328 736 Share of result 2 327 211 649 379 Currency exchange differences -4 998 268 -3 668 049 Change in loan -3 340 867 -2 290 751 Book value 31/12 171 007 391 177 019 315 NOTE 32 - PURPOSE CAPITAL (PC) - GROUP
Purpose Capital The years result Sale of Currency exchange Purpose Capital 31/12/2016 Luntevika Eiendom AS differences 31/12/2017 Founding capital PC with restrictions (SF projects) PC with restrictions (Microfinance) Other purpose capital Total purpose capital
32
3 326 092
3 326 092
5 779 143
-868 765
0
0
4 910 378
136 765 442 106 863 160 252 733 837
2 327 311 -8 358 774 -6 900 328
0 4 717 597 4 717 597
-4 998 268 0 -4 998 268
134 094 385 103 221 983 245 552 838
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To the
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We hav nts the fin e audited th e an statem cial statem financial stat ents o ents o em en f th f the gr ts oup. T e parent fo of Stromm eF he finan un Th cial stat dation and oundation sh e finan loss ow ements ci al Decem st compri of NOK 6 9 ing a loss of 00 328 ber 20 atements o se: N f the p and no 17, and in the OK 8 878 3 ar tes to financi 30 in the fin the income ent foundat and al ancial st atem ion, w st atem h en ents, in t and cash ich comprise Th flow st cludin th e finan atemen e balance g a sum cial stat shee 2017, t fo mary o emen an f signif r the year th t as at 31 the fin d the incom ts of the g icant ac en end roup, w ancial e statem counti ed st h atemen ic en ng poli , In our ts, incl t and cash h comprise cies, opinio the bal flow st uding n: ance sh a sum at mary o ement for ee t as at th f signif • Th 31 Dec icant ac e year then e finan ember en cial stat counti ng poli ded, and no ements • Th tes to cies. are pre e acco pared m p an in acco parent rdance found ying financi atio n as al stat the ye w it h em the law ar standar then ended at 31 Decem ents give a and re true an gu latio ber 20 in ds and 17 ns. d practic accordance with th , and its finan fair view of • Th es gen erally e acco e ci al perfo the financi accepte Norwegian group mpanying rm d in N ance an al position Accou financi as at 3 n o rway. ting A o 1 Decem al stat then en ct and d its cash flo f the em d ws for accoun practic ed in accord ber 2017, an ents give a ting tr d es gen erally ance with th its financial ue and fair accepte vi e Norw Basis p ew erform of the d in N for Op ance fin orway egian Accou inion . nting A and its cash ancial positi on of th ct and fl We co accoun ows for the e nducted ye ting st general our au andard ar s and respon ly accepted in dit in accord sibilitie ance w N o rw Audit ith law ay, incl s under of Group the Financi those stand uding Intern s, regulation s, and al State as req ational ards ar u au accord ance w ired by laws ments sectio e further des Standards o diting stan d and ap n it an cr n propri h these requ d regulatio of our repo ibed in the Auditing (I ards and pra SAs). O ate to rt n A ctices ir s, udito . em W and e en provid e a bas ts. We belie we have fu are indepen r’s Responsi ur dent o lfilled is for o ve that our oth f the F bilities for th ur opin the au o e er un dit evid ion. ence w ethical resp dation and on th e have obtain sibilities in e Pricew ed is su aterho ff ic u T: 023 ient 16, or seCoopers
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Manag em Directo ent is resp o rs’ rep ort, bu nsible for th e t does not incl other inform Our op inion o ude th at any fo e finan ion. The oth rm of n the financi cial stat er assura al ements informatio statem nce co n co en and ou nclusi ts In con r audit mprises th on ther does not co n e or's re eon. ver the inform ection with port th Board of other our au ation an ereon. in dit of th format the fin d, in d an ion an e d we d misstat cial statem oing so, con financial st o not ex ents o atemen sider w ed. If, ro of this b h ts press other in ased on the ur knowled ether the oth , our respo nsi ge wo format er info rmatio bility is to re ion, w rk we have obtained in e perform the au n is m ad the are req Respo d at o it ed er u th or ired to ia , n er report we conclud otherwise ap lly inconsist Finan sibilities of th e that fa ent wit cial Sta ct. We that there is pears to be temen e Board of D mater h have n a mater ially ts o ir th ia e l ing to The Bo ctors a report misstatemen ar nd the in this in acco d of Directo t Mana regard rd ging D . accord ance with rs and the M irector la an an accepte ce with the w and regula aging Direc fo r th e the pre d in Norway Norwegian A tions, includ tor (managem , in p cc or erro aration of fi and for such ounting Act g fair prese ent) are resp nta nancial r. in o an statem ternal contr d accounti tion of the fi nsible for th n ol e ents th n In pre at are as managemg standards ancial statem preparation par free fr and pra ents om mat ent determ the Gro ing the fin an ines is ctices gener in erial m n concernup’s ability to cial statem ally eces isstatem en ent, w sary to enab that th . The financi continue as ts, managem h et le her du e ente e to frau rprise al statemen a going conce ent is respo ts use will ce n rn d si , b d le th is ase op Audito eration e going con closing, as for assessin ap g cern b s. r’s Res asis of plicable, m the Foundat ponsib at ac io te counti n ilities Our ob ng inso rs related to ’s and for the je far as Audit are free ctives are to it is no going of the t likely that in from mater obtain reaso F in ancial ia cl n Statem that an udes our op l misstatem able assura n en in ents genera audit condu ion. Reason t, whether ce about wh ct d et ll ab exists. y accepted in ed in accord le assuran ue to fraud o her the finan ce Misstat an r ci N er is ce al o ror, rway, a st with la aggrega ements incl ws, reg high level of and to issu atements as e an au assura ulation a whole basis o te, they could can arise fr uding ISAs nce wil dit s, om f these financi reasonably b fraud or er l always det and auditin , but is not or’s report g a ec al stat e ements expected to ror and are co t a materia standards an guarantee As par lm t . d influen n genera of an audit in ce the sidered mat isstatement practices ll econo profess y accepted in accordance mic dec erial if, indiv when it with la idually ional ju isions Norway w of users or dgmen s, t and m , including In regulation taken in s, an on the aintain te • id profess rnational Sta d auditing entify standar ional sc ndard to frau and assess s d on Au epticism s and p the risk d or er d it ra in throug ct ro obtain s hout th g (ISAs), we ices audit ev r. We desig of material e audit ex n risk of m . We al ercise not det idence that and perform isstatemen so: to is ecting a mater sufficient an audit proced f the financi ures re al stat d appro ial mis em sp statem p ent resu riate to pro onsive to th ents, wheth vid er ose lting fr om frau e a basis for risks, and due ou d is hig her th r opinion. T an for he one
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result in misre g from err prese ntatio or, as frau d ns, or • o btain the ov may involv a erride e n unders proce of inte collusion, ta d fo rnal c opinio ures that a nding of in ontro rgery, inte re app n on th terna l. ntion lc ro e effe al om • e ctiven priate in th ontrol rele ission valua e v s, e ss a nt to circum of the th estim te the appro st e Foun ances, audit ates a d p a ri in ti b atene on's o ut no nd re order ss t la r to fo • co of the G ted dis roup's r the purp design au nclu closu accountin dit ose res m intern g and, b de on the a ade b policies u al con of express p y man s ed a trol. ing an events ased on th propriate a g e e n ment. nd the rea a goin or conditio audit evid ess of man so nable e a g ness o attenti concern. ns that ma nce obtain gement’s f a u e c If y se d c o ca ounti w , n in o of the such ng ur au e conclud st signific whether go d audit isclosures ditor’s rep e that a m ant doubt a material ing concern a u e a o condit vidence ob re inadequ rt to the re terial unc on the Fou ncertainty basis of ac ert nd ate co ta ex io ns m la ay cau ined up to , to modif ted disclosuainty exists ation’s abil ists related unting • e yo th it ,w se the to re valua Foun e date o f o ur opinion s in the fi e are requ y to contin dation ur au ue as nancia . Our ired to the dis te the overa d co it to cea l se to or’s report nclusions statements draw and e closures, a ll presenta contin . a vents n ti ue as However, re based o or, if in a m d whether on, structu fu a goin n anner th • o re g con ture even the btain that a e financia and conte ts or cern. su l ch n st ff t ie a ic o te ves fa or b u siness ient appro ir pre ments rep f the finan c senta priate statem activit tion. resent the ial statem en underl audit ents. We a ies within audit evide . We re th re n ying tr ts, includin main responsib e Group to ce regardin g ansact We co solely le g m e ions timin municate respo for the dir xpress an the finan cial in g nsible opinio ection forma contr of the aud with the B fo n , su o r n o p ur au o ol tha it dit op ervision an the consoli tion of the t we id and sign ard of Dir ific ecto inion d e d perf entify . orma ated finan ntities durin ant audit fi rs reg ard Repo c n ce o in g our f the g ial rt on audit ndings, inc g, among roup other ludin Other g any m Legal signif atters, th Opinio icant e and R n on th deficie planned s egula co ncies e B oa in inte pe and t o rd of ry Re Based rnal D o quire irecto inform n our aud r m s’ rep it ents ort conce ation prese of the fin rn ass a n n te c ial st d in statem um ents a ption, an the Board atements a d nd co mplie the propo of Directors s describe d s with sa ’ Opinio the la l for the c report con above, it is n on R overa w and our o cernin ge pin regula g egistr tions. of the loss the financ ion that th ation Based is con ia e a o n n d s o istent l statemen u consi Docu ts, dered r audit of with th m entati the fi (ISAE necess e fina the going na on ) ncial Infor 3000, Ass ary in acco ncial state m m rdanc u set ou ation, it is rance En e with ents as de g t sc the la registratio our opinio agements the Intern ribed abo O n w and ati v n bookk and docum that mana ther than A onal Stan e, and con tr g d eepin u g stan entation o ement has dits or Re ard on Ass ol procedu f the fo uranc fulfille views dards res w e e and p o d u ractic ndation’s its duty to f Historic Engageme have al es gen n a erally ccounting produce a Financial ts p in accep ted in formation roper and clearl Norw in acc y ay. ordan ce wit h
34
Report
n
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inistr Based ation consid on our au and d dit of e istrib re d 3000 the fi neces ution n “A s ancia a ssura ry in s our o l state a n c c c p e found inion that Engagem ordance w ments as ith th ents O ation the fo d e Inte escribed s obje unda th e r ab th rn ctives ti and it on is man an Audits ational Sta ove, and c a o s con o stituti ged and d r R eview ndard on ntrol pro s ce is As on as o tr Kristi a who ibutions f Historic surance E dures we h a al Fin is ma le. n a Price nsand, 8 de in ancia gagemen ve June wate a ts l Info ccord 20 rhou rmati ISAE ance seCo 18 on”, it with oper law, th is s AS e Reida r State Henrikse Auth n orise d Pu b lic Ac Note: coun This tant trans lation fro m Norw egian has b een p repare d for infor matio n purp oses o nly.
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 1 7 (3)
t Aud
Strømme Foundation Executive Board, and Advisory Board members 2017 The board; 31 December 2017 Hans Christian Vadseth (chairperson) Ingunn Folkestad Breistein (vice chairperson) Lars Saaghus Ansgar Gabrielsen Anna Minj Substitute Representatives Cecilie Watne Jostein Senumstad Snorre Kjesbu
Advisory board members; 31 December 2017 Stein Hannevik (chairperson) Dag Nordbø Kristin Andresen Frida Marie Røvik Loveleen Brenna Jan Oddvar Skisland Eldbjørg Dahl Erik Solheim Endre Glastad Henrik Syse Svein Gunnar Gundersen Sigbjørn Sødal Eli Beate Winsnes Hillesund Reidun Sørmo Strømme Tor Knutsen Line Alice Ytrehus Andreas Kolaas Christiane Marie Ødegård Melissa Lesamana Ole Martin Årst Hilde Midthjell Election committee; 1 January 2017 Svein Hånes Ingeborg Mongstad Kvammen Stein Hannevik
The facts behind the figures Administration, Fundraising and Purpose cost HOW WE USE THE MONEY/ 2017 Purpose (87,3 %) Administration (3,2 %) Fundraising (9,5 %)
THE FACTS BEHIND THE PURPOSE COST 2017 International project work (91,8 %) Project support/follow-up in Norway 5,6 %) Information, development work/education - public (2,6 %)
The Strømme Foundation is a member of the Norwegian Control Committee for Fundraising. Strømme Foundation is also 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 Contributors: Tørres Gilje, Gase Handeland, Ellen Aarak Tvedt, Celeste De La Huerta, Gro Lindvik Robstad, Christina Milsom, Asle Danielsen Stalleland Lay-out and graphic design: Oddvar Paulsen Photos: © Strømme Foundation
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Skippergaten 5 • 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: postkrs@stromme.org • www.stromme.org www.strommestiftelsen.no