Main trends

Financial Report

Main trends

It is with heartfelt gratitude that we reflect on the 2020 financial results. Like no other year, not only our beneficiaries but also our constituency was affected by a worldwide health-crisis with a big economic impact. Despite this open-end crisis our constituency gave generously. Their donations - combined with contributions from institutional donors - enabled ZOA to accomplish more. We are grateful we were able to reach the most vulnerable people in the most dangerous places. Helping those in need demands a lot from our employees - both in the countries where we operate and at our headquarters in the Netherlands. We laud their accomplishments. Together we make a lasting impact in the lives of those affected by conflicts and natural disasters.

Income from Dutch constituency

Income from our constituency in 2020 was 12,5% higher than last year. Despite the corona crisis, more was given and the budget was more than met. We feel blessed with the large contributions of € 13.4 million from our constituency.

INCOME GENERATED FROM ZOA'S OWN FUNDRAISING ACTIVITIES AND THIRD-PARTY CAMPAIGNS Actual 2020 Budget 2020 Actual 2019

Unearmarked

Earmarked 5,583,583 6,357,200 5,611,834

42% 54% 47%

For reconstruction 4,872,976 3,847,000 4,532,320

For emergency campaigns 2,931,295 1,665,800 1,758,708

7,804,271 5,512,800 6,291,028

58% 46% 53%

13,387,853 11,870,000 11,902,862

We are committed to responsibly spending funds on quality projects that have a lasting impact and for which income has been secured. There is, therefore, an unavoidable delay between the date income is received and the date of actual expenditure. Consequently, income received never equals expenditures on projects.

Net result

The profit and loss account shows a negative result of € 2.2 million. Of this amount, € 1.1 million relates to expenditures in 2020 from programme funds received in previous years. Furthermore, € 1.5 million was withdrawn from specific earmarked reserves. On balance, we were able to make an addition to the general reserve of € 0.4 million, partly as a result of the implementation of cost savings.

Country portfolio

Project expenses in programme countries were in line with the budget (€ 54.6 million budgeted versus € 55.3 million realized on projects in 2020). Alongside the income from the Dutch constituency, income from institutional donors also increased. Due to the growth of institutional funding, the demand for pre-financing is growing as well. Strict financial management is required to manage the necessary growth in reserves.

Good stewardship

Given the high-risk, unstable contexts in which ZOA operates - and our core organisational values of faithfulness and stewardship - we aim to retain a portion of the entrusted funds as reserves. As per the end of 2020, the balance sheet shows sufficient liquidity for ZOA to meet all its short-term obligations.

In line with RJ650, ZOA distinguishes between continuity reserves and designated reserves for specific purposes. At the end of every year, ZOA reassesses the level of risk its country programmes are exposed to, including the increasing need to pre-finance essential projects. ZOA also keeps the financing assets in reserve as financed fixed assets, which caps liquidity.

In 2020, the general continuity reserve increased due to the above-mentioned assessment of the reserves. ZOA is experiencing organisational growth; therefore risks are increasing as well. The level of the general reserve is currently slightly below the minimum desired level as determined by the Executive Board and the Supervisory Board. ZOA prefers to maintain reserves for specific goals rather than for general purposes.