Annual Report and Accounts For the year ended 30 June 2012 CARE International UK Key information
The Trustees of CARE International UK are Directors for the purposes of company law and Trustees for the purposes of charity law (hereinafter referred to as “the Trustees”). The Trustees are as follows:
Oliver Stocken (Chair) [Appointed 20.9.12] Richard Greenhalgh (Chair) 1 [Retired 20.9.12] Professor Michael Adler 4 Neil Alldred 4 Andy Bearpark 1, 4 Angela Cluff 3 Dr Alison Fielding 2, 3 Frances House [Resigned 21.6.12] Stephen King Susan Liautaud 3 William Macpherson 2 Michael Rogerson 1, 2 Dharmender Singh 4 Richard Street 1, 3, 4 Dr Fiona Thompson 1, 2, 3
Additional committee members Edward Bickham 4 Michael Dyson 4 Nick Edwards 2 David Sanderson 4 Anne Siddell 2 Lyndall Stein 4 Andrew Studd 2
Senior management team Geoffrey Dennis - Chief Executive Sarah Taylor Peace - Marketing Director John Plastow - Programme Director Mark Salway - Finance Director Lucy Stoner - Human Resources Director
Registered office CARE International UK, 9th Floor, 89 Albert Embankment, London SE1 7TP. Tel: 020 7091 6000, Fax: 020 7582 0728. For more information about our work, go to www.careinternational.org.uk
CARE International UK is a registered charity (registration number 292506). It is also a company limited by guarantee and was established on 7 May 1985, with registration number 01911651 (England and Wales).
1 Nominations and remuneration committee 2 Finance and audit committee 3 Marketing working groups 4 Programme committee
2 Defending Dignity. Fighting Poverty. Index
Page Annual Report and Accounts
Key information...... 2
Index ...... 3
About CARE International and CARE International UK...... 4
A message from our retiring Chair...... 5
A message from our Chief Executive...... 6
Trustees’ report
CARE International UK’s goals...... 7
2012 Overview against priorities...... 8
Progress against our six core roles within the CARE International confederation...... 16
Lendwithcare...... 21
Structure, governance and management...... 23
Operational structure of CARE International UK...... 24
Statement of Trustees’ responsibilities...... 25
Internal controls ...... 26
Financial review...... 28
Thanks to all supporters, staff and volunteers...... 31
Independent auditor’s report to the members of CARE International UK...... 32
Financial statements
Consolidated statement of financial activities...... 34
Group and charity balance sheet...... 35
Consolidated cashflow statement...... 36
Notes to the accounts...... 37
Advisors...... 48
Thanks to our donors...... 49
Thanks to our ambassadors...... 50
Map of CARE’s work...... 51
To avoid confusion in this report we refer to the following: ‘CARE’, ‘CARE International’ or ‘CARE International confederation’ where we consider CARE globally; and ‘CARE International UK’ or ‘CIUK’ when we talk about the UK-based organisation and activities.
Annual Report and Accounts for the year ended 30 June 2012 3 About CARE International and CARE International UK
CARE International’s vision CARE International seeks a world of hope, tolerance and social justice, where poverty has been overcome and people live in dignity and security. We will be a global force and partner of choice within a worldwide movement dedicated to ending poverty. We will be known everywhere for our unshakeable commitment to the dignity of people.
We work in 84 countries across five continents. In the past year, we have directly supported more than 122 million people. This makes us one of the biggest aid and development agencies in the world. 97% of CARE staff are citizens of the countries where they work, helping local communities to help themselves.
When emergency strikes, we get there fast because we are permanently working in countries. We save lives and meet immediate needs. And once the world’s focus has moved on, we’re still there, helping to rebuild devastated homes and livelihoods.
In areas where famine and flooding are serious threats, we work with communities to help them prepare for the worst, building their resilience to disaster.
For others, where emergency is not such a threat, but poverty prevails, we help people tackle the root causes. These may be very tangible, improved health services for example, or may involve helping people to be in control of their own situation by strengthening their ability to influence decision-makers.
We focus on women and girls as they are typically the most marginalised in their society and, by helping them, we can maximise our impact on poverty.
To bring about lasting change, we build strong understanding of the local context, hiring local staff and working in partnership with local organisations.
CARE International UK’s mission CARE International UK is a driving force within the worldwide CARE International confederation, which has its secretariat in Geneva.
We are recognised within the global organisation for:
• making resources available for overseas activities • influencing the policies and practices of government, business and other organisations • inspiring and engaging the public • continuously improving the impact of our work.
4 Defending Dignity. Fighting Poverty. A message from our retiring Chair
Although it will be difficult to move on after eight rewarding years as Chair of CARE International UK, I am pleased to be leaving at a time when CARE is delivering new and sustainable solutions to poverty. Coming from the private sector, I have been especially interested in seeing the emergence of CARE’s work with business, influencing the sector to play a positive role in the fight against poverty. The increasingly global nature of many large companies’ operations means they have a significant role to play in development issues. It is crucial to CARE to ensure that role is a positive one, applying its influence to shape market interactions and stimulate inclusive growth that favours the world’s poor. We are therefore working with a number of multinational corporations such as Barclays and Kraft helping them to embrace new business models which have social, environmental and economic benefits. GlaxoSmithKline is one of the companies we are partnering with and through GSK’s commitment to reinvest 20% of profits made in the Least Developed Countries back into projects that strengthen the healthcare infrastructure of those countries, we have been able to invest heavily in long-term efforts to improve maternal, neonatal and child health. CIUK was one of three leading NGOs chosen to lead this re-investment and our focus is on the Asia Pacific region. We don’t, however, only work with big business. Our micro-financing initiative, lendwithcare.org, was launched in 2010 and has been going from strength to strength, with loans approaching the £1 million mark this year. The scheme allows people here in the UK to lend small sums of money, typically around £15-£30, to entrepreneurs in the developing world who need a loan to start or expand a small business. Lenders I have spoken to say they find it really rewarding to be able to follow the progress of the venture they have invested in, and, once the loan is fully repaid, re- invest in another entrepreneur. I have invested myself, in Zalifa, a market stall holder in Togo. We are thankful to The Cooperative for their sponsorship of this initiative. In some parts of the world where CARE works, people find it so hard to meet their basic needs that they are not in a position to benefit from the sorts of initiatives I have mentioned above, and we need to focus our efforts on helping the very poorest achieve their fundamental human rights. One such project is our work in the Indian state of Bihar, helping the entire state meet the Millennium Development Goals by increasing usage of quality health, nutrition, water and sanitation services. We have particular expertise in governance, and our work therefore centres on building the capability of several key departments within Bihar’s government, including the Departments of Health, Social Welfare and Public Health Engineering, to deliver on reforms in their respective areas and improve provision of, and access to, health facilities. As a leading global NGO, another role CARE plays is helping those without a voice be heard. This year, one example of our advocacy work was helping host a series of meetings in Bonn, Germany, between women’s rights activists from Afghanistan and diplomats who were attending a conference on the future of the war-torn country. By taking these women to Bonn, we helped to ensure that their views, too often side-lined, on the future of their country were heard. Finally, I would like to thank all the people whom I have worked with over the past eight years. There are too many to mention individually, but I would particularly like to thank my fellow Trustees, Geoffrey and his team, and all the staff. CARE is a marvellous organisation – sustainably fit-for-purpose and equal to the future challenges it faces. I am delighted that Oliver Stocken has taken over from me and I want to wish him, and all at CARE, continued success in the years ahead.
Richard Greenhalgh, Chair of Trustees [Retired 20.9.12]
Annual Report and Accounts for the year ended 30 June 2012 5 A message from our Chief Executive
At CARE International, we have two overriding duties. One is to respond immediately when a humanitarian disaster strikes in the developing world. The other is to find longer-term, sustainable solutions to the poverty we see in the developing countries we work in – solutions that respect the knowledge and dignity of poor communities and allow them to have a say in their destinies. Over the past year, I have been able to witness first-hand how we at © Jon Spaull/CARE International © Jon CARE are fulfilling those duties with dedication and imagination. I visited Uganda recently with ITN newscaster Alastair Stewart to see an example of our innovative work in action. Banking on Change is a partnership between CARE, Plan and Barclays which builds on the success of village savings and loan schemes, first developed by CARE in Niger more than 20 years ago, and takes them to the next level. Over the past three years, not only has this partnership helped 430,000 people in 11 developing nations collectively accrue savings of $6 million, but it is also linking them in to mainstream financial services for the very first time. I was particularly struck on my visit to Uganda by the experience of Hassan who earned barely enough to survive when he was farming. He joined his local village savings and loan association and took out a loan to start a small mobile phone shop. His business has now grown so much that he has been able to set up his own bank account, build a better house for his family, send his children to school and go back to university himself. Hassan told me that just a few years ago he couldn’t have conceived of ever having the confidence to set foot in a bank. This year I also visited South Sudan, the world’s newest country, as it approached its first anniversary following its split from Sudan. CARE has worked in the region for more than two decades, and we continue our relief and development activities. On my visit, I witnessed a new aspect to our work there, helping large numbers of displaced families and ‘returnees’ as they make their way home to South Sudan. The conditions the returnees are living in were some of the worst I have ever seen. I saw children drinking water straight from polluted streams, and families living in makeshift homes where the dirt floors had turned to mud at the onset of the rainy season. One family had made their shelter from a collection of chairs and other belongings they had carried with them on their journey home. Disease levels are very high in such conditions so our work is focused mainly on providing healthcare services and clean water supplies. We are also distributing fresh purified water, and teaching communities about the dangers of not boiling or treating water. At CARE, we are proud of the fact that we work tirelessly in poor communities long after the camera crews have left and this year I revisited a small village in south-eastern India which had been totally destroyed in the 2004 Tsunami. Not only were all the villagers’ huts washed away, but so was the source of their livelihoods as the small inland waterways they relied on for freshwater fishing were destroyed. CARE rebuilt their houses and worked with the community to develop alternative income-generation activities such as cashew nut production and crab farming. That community, and many others, are now totally self-sufficient and need no outside assistance. This, I think, is what our work is all about. Some of the villagers showed me into their new homes where many have painted the CARE logo as thanks to our organisation. I would like to thank all CARE staff for their efforts and determination. We have talented and highly motivated staff both here in our office in London and in all our overseas offices who are deeply committed to our work fighting poverty across the globe. I also want to thank our Board of Trustees for their dedication, and I particularly thank our outgoing Chairman, Richard, for his help, support and friendship over the past eight years. Geoffrey Dennis, Chief Executive 18 October 2012
6 Defending Dignity. Fighting Poverty. CARE International UK’s Goals
Our priorities CARE International UK’s focus is in the following areas, building on our significant expertise and sharing our knowledge with others engaged in poverty reduction and humanitarian relief: • Private sector: the private sector has a critical role to play in reducing poverty. We engage with companies to improve the impact of their activities on poverty, develop innovative partnerships and challenge market systems to be more inclusive so that real opportunities are created for poor people. • Governance: the capacity of poor people to influence the institutions that govern their lives is fundamental to addressing the underlying causes of poverty. Our work spans urban poverty, gender, civil society and the workings of the aid system. • Conflict and peace-building: in an increasingly turbulent world, we provide expertise and support to our field operations working in countries in conflict, by supporting programmes spanning peace-building, reconciliation and rehabilitation. • Emergency shelter and reconstruction: with a long-term presence in many of the world’s most vulnerable countries, CARE takes a comprehensive approach to emergency response including preparedness, immediate assistance and long-term recovery. CIUK is a major contributor to CARE’s global response to emergencies and we lead on the provision of high quality shelter support in humanitarian situations. Progress against our priorities is outlined on pages 8 to 15. We also contribute to the following key areas, following the global leadership of others within the CARE confederation: Climate Change Adaptation, Food Security and Resilience, Maternal and Reproductive Health, Water and Sanitation, and Education. Across all our work, we are committed to gender sensitivity with a particular focus on women and girls and to a sustainable and impactful approach to our programmes.
Our role in the CARE International confederation CARE International UK (CIUK) has six key roles within the confederation: • Enhancing programme quality: using our extensive experience and understanding to work with our country offices to improve the quality of our programmes worldwide. • Raising new funds and resources: developing a new approach – becoming less dependent on institutional income – to source more flexible funds for investment in high quality programmes, and to respond more effectively in emergencies. • Influencing policy: drawing on our experience and engaging with policy-makers to address the barriers to fighting poverty at all levels. • Raising profile and awareness: becoming a credible source of information for policy- makers, opinion-formers and the UK public in our areas of expertise, and working with peers to raise public awareness of global poverty issues. Similarly, raising our profile to have a greater influence on our target audiences and to make it easier to raise funds for our beneficiaries and our work in fighting poverty. • Linking into CARE International globally: ensuring the confederation benefits from the expertise we develop, including playing an integral part in CARE’s emergency response, and supporting its drive to become more representative of its beneficiary constituency. • Becoming a more efficient and effective organisation: building the effectiveness and skills of our workforce, maintaining appropriate levels of overheads and achieving high standards of donor accountability, compliance and reporting. Progress in each of these key roles during the year is outlined on pages 16 to 20.
Annual Report and Accounts for the year ended 30 June 2012 7 2012 Overview against priorities
Private sector engagement More than 2.6 billion people worldwide live on less than $2 a day. Many of these people interact with markets – as producers, workers, traders or consumers. CARE believes that a responsible and accountable private sector can be a major driving force to reduce poverty, in the same way that weak, or poorly enforced, business regulation and irresponsible business practices can keep poor people locked in a cycle of poverty. Companies and development agencies have common interests in tackling some of these issues together, and we see working with business as a way to combine expertise and resources, from which both economic and social gains can be derived. We work in partnership with the corporate sector in the UK as well as supporting a variety of private sector programmes across the CARE confederation. We look to engage with the private sector to develop services, products and markets for poor, vulnerable and marginalised people. We also work with companies (small, large, local and international) to improve their policies and practices, and to make market systems more inclusive, socially responsible and accountable. Our work is seen as pioneering by the Department for International Development (DFID) and other policy-makers, and we are now focusing on three different areas of work: 1. responsible business practices 2. microfinance and access to financial services; and 3. market-based initiatives to drive economic development for poor people.
Last year, CIUK spent £3.9m on private sector engagement work, accounting for 23% (2011: 17%) of our total programme expenditure (excluding emergencies). Highlights include: • Our Banking on Change partnership with Barclays and Plan aimed, over three years from 2009-2012, to provide 400,000 people across 11 countries with the opportunity and skills to save and manage their money more effectively. This year, the partnership exceeded its target, reaching 488,000 individuals, who collectively saved over £4.5 million. The achievements of the partnership were recognised when it won gold in the category of Most Effective Long-term Philanthropic Scheme at the Corporate Engagement Awards and the award for ‘Best overseas project’ in the Third Sector Business Charity Awards. • In the past year, we have more than doubled the number of cocoa farming communities that we reach in Ghana (from 35 to 76) through our partnership with Kraft (Cadbury). The cocoa farmers have seen their incomes rise and their yields increase as a direct result of the work of the partnership. • CIUK was chosen by global pharmaceutical firm GlaxoSmithKline to provide training and support to frontline health workers in communities across Asia. The partnership will improve access to basic healthcare for thousands of poor and marginalised communities in Nepal, Afghanistan, Myanmar, Cambodia and Bangladesh. It is part of GSK’s commitment to reinvest 20% of the profits it makes in some poor countries back into strengthening those countries’ healthcare systems. We have already begun work on the ground in Afghanistan and Nepal. • This year, CARE and Danone announced the creation of JITA, a ground-breaking NGO and private sector hybrid organisation. Formerly an aid-funded programme reaching marginalised women in Bangladesh, JITA is now a profitable social enterprise that provides employment to women who sell both local products, and products from multinational companies such as Unilever, to other women in their communities. It was launched in April 2012 at the prestigious Skoll World Forum on Social Entrepreneurship at Oxford University’s Saïd Business School. JITA pushed the boundaries of the relationship between business and development, demonstrating the potential for market-based approaches to provide economic empowerment for poor women (see the case study opposite).
8 Defending Dignity. Fighting Poverty. ‘Avon ladies’ of Bangladesh (JITA) Joytara is a rarity in Bangladesh: she owns land in her own name. But, before this happened, the 35-year-old mother of two faced destitution when her husband became paralysed and her work as a maid was not enough to sustain her family or keep her children in school. CARE heard about Joytara’s situation and invited her to become an Aparajita. ‘Aparajita’ means ‘women who will not accept defeat’. Akin to Avon ladies, women like Joytara travel from home to home selling products from companies such as Unilever, Danone, and Grameen that range from shampoos, soaps and sanitary towels to mobile phone packages and shoes. The programme, called JITA, gives vulnerable women an opportunity to earn a decent wage. Working to promote gender equality, the scheme empowers women to set up their own businesses giving their families a better future. Joytara tells her story: “The main problem at first was social acceptance. People didn’t think a woman should do this sort of work and they thought I was selling fake products, but now I have become accepted in the community. “People used to shun us. They might give us food but they wouldn’t lend us any money if we needed it. Now I lend money to others who are more needy, and I even advise people in the community. “Women who stay in the house with no options should work like me and make themselves independent. I can decide how to spend money. I have two daughters, Shuma, aged 8 and Shumi, aged 12. I can keep both my daughters in school and my husband has more respect for me. I have become the main decision-maker in our household. “Normally it is just men who own land, but recently, as a family, we bought land and it will be registered in my name. Our house used to be very small, on a small corner of land. It is now much bigger and I am very proud. “In the future I would like to start my own shop. It will take a few years to do this but I will receive support from CARE as an incentive for continuing to work as an Aparajita.” CARE received support from the Business Innovation Facility, a DFID-funded initiative created to encourage a business-based approach to development. The support included consultants from Accenture Development Partnership who helped CARE to design a business plan that would successfully balance making a profit and meeting development objectives, and turned the former NGO-managed programme into a commercially viable business. © Kathryn Richards/CARE International Richards/CARE © Kathryn
Annual Report and Accounts for the year ended 30 June 2012 9 Governance
Governance is the sum of the many ways individuals and institutions manage their common affairs. It is a dynamic, political process through which decisions are made, conflicts are resolved, diverse interests are negotiated, and resources are allocated. So it’s important that poor and marginalised people, particularly women and girls, have a say.
We are supporting poor people to raise their voices, while at the same time we work with public authorities to ensure that these voices are heard. By supporting this dialogue between citizens and power holders, we believe that better decisions can be made, resulting in benefits for poor citizens, such as improved healthcare.
Last year, CIUK spent £5.4m on governance activities, accounting for 32% (2011: 45%) of our total programme expenditure (excluding emergencies). Highlights include:
• In Rwanda, we are partnering with Norwegian People’s Aid to implement the ‘Public Policy Information Monitoring and Advocacy’ (PPIMA) initiative. The aim is to empower civil society to promote engagement in public affairs, with activities focused at both local and national levels. This project has supported a community score card (CSC) process in 190 villages across four districts. CSC is a method for communities to monitor the availability and quality of a service, such as health and education. PPIMA brings communities and service providers together to discuss problems identified by the communities and find local solutions. When issues cannot be resolved at the local level, the CSC process informs district or national level advocacy and informs change at a national level. • We have developed a Governance Resource Pack to assist CARE country offices in developing and implementing governance programmes. This consists of the Governance Programming Framework, Monitoring and Evaluation Guidance Note, and the Context Analysis and Programme Design Guidance Note. These tools are now being used across more than 25 country offices. • We are working in the Democratic Republic of Congo on a ‘Supporting Access to Family Planning and Post Abortion Care’ project that will reduce unintended pregnancies and deaths from obstetric complications, including unsafe abortion. As part of the project, we are training people to monitor the provision of family planning and maternal healthcare services, using the CSC methodology described above. This enables local communities to monitor the services they actually receive against what has been promised. We then facilitate the conversation with local government to ensure poor people have access to the services they should. • Our ‘Participatory Voices’ initiative, in Peru, is training community volunteers to monitor health services provided to marginalised women in their communities. Through feedback to policy-makers, this initiative has brought about significant policy change at national and regional level. For example, we have worked with the Ministry of Health to produce a guide for community health workers so they can better understand the cultural practices of indigenous women and to develop training materials for health workers specifically catering to their needs.
10 Defending Dignity. Fighting Poverty. Bangladesh: Emergence of natural leaders Before CARE launched its ‘Social and Economic Transformation of the Ultra-poor’ programme in northern Bangladesh in 2009, women’s leadership skills were limited, they rarely interacted with power holders and had little influence. Discriminatory social and political norms together with a lack of skills, knowledge and confidence excluded women from any form of decision-making.
After attending training, some individuals have emerged as ‘natural leaders’. So far, more than 3,000 natural leaders have been identified. Individuals from ultra-poor backgrounds now have improved confidence, livelihood skills and the ability to organise and mobilise people for community development. 61% of the natural leaders are women. This is significant as, in Bangladesh, women are normally seen as having no role outside the home.
As a result of the project, women and men are engaging in new economic activities and 55% of community members have increased their income as a result. There has also been a rise in the number of households that eat three meals a day, something that was rare before the project began.
In addition to these community-wide changes, women have gained significantly. Three women are now elected representatives of their local government committee – roles that are traditionally held by men. Three other women have the intention of running for the next election. Women’s increased confidence is visible in their enhanced ability to act as ‘watchdogs’ and use the negotiation skills they have learnt to increase the local government’s accountability and responsiveness to women’s rights and needs. This has led to officials, in some areas, agreeing to provide free healthcare to pregnant women and children, and all-year access to water for a drought-prone village.
This capacity-building often plays a part in empowering women to be the catalyst for change in their communities. Through empowering women we see improved self-esteem and self-confidence which, in turn, increases engagement in decision-making. This increased engagement produces tangible benefits to communities by improving their access to public services and their standard of living. © CARE International
Annual Report and Accounts for the year ended 30 June 2012 11 Conflict
Violent conflict disproportionately affects some of the poorest countries in the world. Poverty and conflict are often inter-linked: either can cause or exacerbate the other.
Besides bringing death, injury, trauma and displacement, violent conflict disrupts livelihoods and food production. It destroys economies, infrastructure, and both social and natural resources. It prevents governance systems from functioning effectively, and creates social tensions which take generations to heal. All of these things can undermine long-term development work.
Much of CIUK’s work involves support to CARE country offices – carrying out research with them, building their capacity to tackle the issues they face, providing technical support and writing funding proposals. We also work with peer agencies and governments to share better practice and influence policy.
We seek to embed conflict sensitivity in our programmes in fragile places around the world – analysing the context, and ensuring our work has maximum benefit and avoids inflaming conflict.
We work in many countries currently affected by, or recently emerging from, violent conflict – including Afghanistan, Yemen, Nepal, Somalia and the Democratic Republic of Congo.
Last year, we spent £1.4m on conflict and peace-building activities, accounting for 9% (2011: 14%) of total programme expenditure (excluding emergencies). Highlights include:
• In Afghanistan, we supported the national network of women’s rights activists to organise consultations across the country on how the impact of violence and political instability on women can be mitigated. • In Uganda, Rwanda, Burundi and the Democratic Republic of Congo, we have supported local organisations that work with survivors of rape and other forms of abuse in conflict to call for a new action plan by governments in the region to end such violence and tackle impunity. • In the last year we have trained UK Foreign Office staff and partners in Pakistan and European Union advisers on the design, monitoring and evaluation of peace-building programmes. • We completed a full roll out of our ‘Do No Harm’ framework across our country offices, building on the pilot completed last year. The application of the ‘Do No Harm’ framework enables staff to ensure that their programming is not inadvertently contributing to conflict. • We supported learning and sharing of knowledge across CARE by bringing staff from 30 country offices together as a ‘community of practice’ in a series of workshops and exchanges to share their experience of what works in their own context. • We published three best practice guides for the conflict prevention sector. The guides, which resulted from the work of the inter-agency Conflict Sensitivity Consortium and a second CARE-led consortium on improving peace-building impact, have become key reference documents for practitioners, donors and CARE’s own conflict ‘community of practice’.
12 Defending Dignity. Fighting Poverty. Democratic Republic of Congo: Rebuilding lives after war When war ends, the combatants have to return home – often to communities that are understandably hostile towards the people who caused their pain and suffering. These combatants don’t have any way to support their families and need help to reintegrate back into a society that is trying to rebuild itself. Miroro and Furaha married in 2002 and have five children. Miroro spent 13 years in the army, leaving in 2006. When he left the army he found himself living amongst a distrustful community in the Democratic Republic of Congo. “The community’s reaction towards me when I returned was that they couldn’t believe I was a civilian and always asked to see my discharge papers. They weren’t necessarily afraid but weren’t sure how to act around me as they thought I might still be a soldier.” The reaction of the community was just one part of the family’s problems, as Miroro explains: “When I left the army there was nothing for me to do. I couldn’t send my children to school because the fees were too expensive. We lived here on the charity of the community.” But, since joining a CARE project and receiving business training, the family has seen their fortunes change with the opening of a small shop in front of their home that is well used and supported by the local community. Miroro’s wife, Furaha, has seen changes since their involvement in the project. “Everything he gets, he shares. We now have food and clothes. Each time he gets money he brings it to me and we talk about how to use it.” Miroro is also happy that he is his own boss. “I don’t have to take orders from anyone else. I can support myself for the first time and send my children to school. I have learned how to generate an income, keep track of the money and reinvest it.” The project is working with ex-combatants to find viable ways to earn a living, through hairdressing, mechanics, livestock rearing and small commerce. The participants are also given kits to start their business and we have worked with local authorities to get taxes waived for the first year so that the businesses are provided with the best start possible.
© Julie Edwards/CARE International Edwards/CARE © Julie
Annual Report and Accounts for the year ended 30 June 2012 13 Emergency and humanitarian relief
This year, disasters and conflict disrupted the lives of approximately 200 million people5, and poor people and communities were hardest hit. Because CARE is already working in many countries where emergencies strike, staff are well-placed to meet immediate needs. And we stay there for the long-haul, continuing to rebuild lives and livelihoods.
We responded to more than 50 emergencies in the last year. These included 11 conflicts, in countries such as South Sudan; 28 natural disasters which included flooding in Pakistan and Bangladesh; and 11 chronic crises such as drought and food insecurity in Eastern Africa. Around 70 million people were affected by these emergencies and we assisted over 18% of those affected either directly or indirectly.
CIUK’s donors include the Disasters Emergency Committee (DEC), DFID, and the European Union, as well as private individuals, trusts and corporate donors. CIUK is a member of the DEC, of which our Chief Executive, Geoffrey Dennis, is a Trustee. We are also a member of the Consortium of British Humanitarian Agencies (CBHA).
Last year, we spent £20.8m on emergency and humanitarian relief work, accounting for 53% (2011: 59%) of total programme expenditure. Highlights include:
• We became one of the few NGOs that can access the DFID Rapid Response Fund. When an emergency strikes, we are pre-selected, for a 24-hour window, to access funds from DFID. We have already drawn from this fund for our cholera response in Sierra Leone in August 2012. • In Bangladesh, we have been continuing to support the recovery from Cyclone Aila which hit the country in 2009. With funding of over £2m we helped the most affected families to restore their livelihoods, secure family income and rebuild homes. We have also been working on an innovative project with small–scale fishermen, using digital tracking and radio services, to provide an early warning of impending storms and seaquakes. • Pakistan is still recovering from the 2010 floods which affected 18 million people, destroyed 20% of the country’s area and a substantial part of the harvest. We received funding from DFID, the European Community Humanitarian Office (ECHO) and the DEC to respond to the immediate needs of flood-affected communities for health, water and sanitation and shelter. We have been continuing this work to build resilience and recovery for the local population. • In the Horn of Africa, we reached 300,000 people affected by food insecurity by providing food and water on a day-to-day basis. • During South Sudan’s first year of independence we have been working with refugees and people who have been displaced within their own country. We supported around 70,000 people affected by the conflict by providing essential healthcare, water, hygiene and sanitation facilities. • We continue to support Haiti’s earthquake recovery. Further funding has enabled us to carry out vital infrastructure improvements and disaster mitigation to reduce the local population’s vulnerability. • We are an active member of the Emergency Capacity Building Project in a consortium of NGOs funded by the Gates Foundation, ECHO and World Vision. Alongside Catholic Relief Services, MercyCorps, Oxfam GB, and Save the Children, we aim to build the capacity of humanitarian agencies to provide quicker, more effective responses to emergencies. Through the project, we have supported the work of shelter specialists by improving accountability to affected populations. Training on accountability and impact measurement has been provided to UN agencies, and international and national NGOs.
5 EM-DAT (http://www.emdat.be/natural-disasters-trends)
14 Defending Dignity. Fighting Poverty. En-route to the world’s largest refugee camp The most dangerous period for refugees is when they are on the move. Women and girls are especially vulnerable to rape, abduction, illness and even death. Many may walk for weeks in search of safety. Although it is just nine days since Muna arrived at Dadaab, the world’s largest refugee camp on the border between Kenya and Ethiopia, she does not live with other new refugees on the outskirts of Dadaab, but in the comparative comfort of a room within the camp. As soon as she arrived, she managed to trace clan members, who let her use the room. Muna is 40 years old, and came to Dadaab with her seven children. She left her husband behind because the bus fare was too expensive for all of them. He let them go ahead, remaining behind to raise more money for his own trip. “I will join you soon,” he said as he waved them goodbye. Muna’s journey from Somalia took her 18 long days. She had to feed her children wild fruit and look out for wild animals. Her children are all safe now. But, midway through their journey, bandits stopped their bus and ordered all the women to step out. “They told the older women to get back into the bus. Five of us stayed behind, with our children. The bus driver was ordered to drive off and leave us behind. Then they raped us,” she said. The children were pushed away behind some bushes and instructed to be quiet by one of the men, as the others went back to the women and raped them. It was broad daylight, but no vehicle passed. They screamed for help and their children were crying in fear, but nobody came. “Afterwards they told us to take our children and keep walking.” Muna and the others walked 17 kilometres before reaching somewhere they could find help. They told some village elders what had happened. The elders raised money so the women could continue their journey. Muna and the others finally made it to Dadaab. She is just happy to have some private space with her children, among her larger clan. “I am glad we arrived here, and all my children are ok. We finally got some food, water and a room. There are so many people, but it is like we are alone, because my husband is not here.” Dadaab lacked adequate screening facilities to help those who had suffered sexual abuse or violence on the way from Somalia to the camp. So, CARE set up special tents at reception centres in Dadaab to help identify such survivors. Appropriate counselling and emergency medical attention is now made available. Muna was referred to a clinic by the CARE staff that interviewed her, but she has not gone to the clinic yet. She is afraid she may be pregnant from the ordeal, or have a disease. She said she would wait a few more days. However, CARE will continue to monitor her progress and help her rebuild her life. © Kate Holt/CARE International Holt/CARE © Kate
Annual Report and Accounts for the year ended 30 June 2012 15 Progress against our six core roles within the CARE International confederation
Enhancing programme quality Last year, we set the following objectives for the year:
• cement our leadership within CARE International around our focus areas of private sector engagement, governance, conflict and emergency shelter in ways that promote inclusive engagement across the confederation • focus on drawing out lessons around new models for engagement that can be replicated or taken to scale • promote greater synergy between CIUK’s programme quality, advocacy and funding agendas.
This year, we made good progress in building networks based around our technical focus areas by working with other stakeholders both within the CARE confederation and externally. In particular, we strengthened our focus areas so that they were more relevant to the activities of our country offices, and we are now clearly leading across the confederation in each of these priority areas.
This year, we also drew out lessons from our work and shared these more effectively. Examples include:
• CIUK played a leading role in publishing three best practice guides for the conflict prevention sector. The guides have become key reference documents for practitioners, donors, and CARE’s own network of conflict practitioners. • Our governance work advanced significantly during the year, with the publication of new guidance for CARE country offices on measuring results, and the launch of a rigorous impact evaluation on the use of community score cards to improve health services. This has been replicated in other health projects across CARE International. • Improving our ability to measure impact and value for money is a continuing focus. A highlight this year was a partnership with the New Economics Foundation to examine the ‘social return on investment’ of our climate change adaptation programming, which concluded that adaptation makes excellent economic sense. This is now allowing us to take some of these climate change adaptation pilots to greater scale and take lessons from one country and apply them to others.
This year, we focused too on restructuring our Programmes teams, bringing them closer together to provide greater cohesiveness and efficiency. We restructured our programme funding teams, adding more resources to support this work.
Our priorities for next year are to:
• review our monitoring and evaluation standards across CIUK-led projects • document lessons from our microfinance work and, in particular, our experiences linking informal community savings groups with formal financial services.
16 Defending Dignity. Fighting Poverty. Raising new funds and resources The year has been a successful year as we made further progress in implementing our fundraising ambitions, although we continue to find ourselves in a difficult fundraising environment.
Progress against our objectives for this year has been as follows:
• We worked very hard to grow our income from donors and events, despite a difficult economic environment, but decided to hold back on certain appeals where we were not making a sufficient return. With no additional expenditure, our income remained stable, which is a positive result in these tough times. • We have continued to grow our engagement with corporates. Our new partnership with GlaxoSmithKline was officially launched in July 2011. This partnership, our partnership with Kraft (Cadbury) and our Banking on Change partnership with Barclays continue to be seen as leading in the sector. • www.lendwithcare.org, our innovative microfinance lending site, has now provided nearly £1 million in loans, and supports more than 2,400 entrepreneurs. A more thorough overview on this work is given on page 21. • Our first supporter-led community campaign, Walk in Her Shoes, had more than 300 participants and surpassed our target, raising £51,500. • Our objective of bringing the programme and funding teams together and restructuring their work went well. The new Programme Funding and Management Unit had a successful year with the awarding of 14 new contracts. A particular achievement was our engagement with DFID tenders and our success in being awarded DFID’s Conflict and Fragile States framework agreement. • We also became one of the few agencies able to draw down against the DFID Rapid Response Fund. This will enable us to be in the first tier of respondents when an emergency strikes.
Our priorities for the year ahead are to:
• deliver an imaginative PR and marketing campaign for www.lendwithcare.org to attract 8,000 new lenders, increase our scope with this new initiative and provide more rigorous analysis of the programmatic impact and benefits • continue to invest in our donor marketing to meet our objective to bring significant growth to our donor income • finalise a new five-year funding strategy which gives us the tools to make accurate and informed investment decisions and increase the proportion of flexible funds available • develop Walk in Her Shoes into a flagship campaign for CIUK delivering supporters, unrestricted income and a platform for us to advocate on our work involving women and girls • continue to focus our efforts on boosting our contract pipeline from institutional and trust funders and grow our portfolio of corporate partnerships.
Annual Report and Accounts for the year ended 30 June 2012 17 Influencing policy This year, we have developed a new advocacy strategy which sets out a vision of how CIUK can achieve its advocacy ambitions. It signals a shift in emphasis for the organisation that is very much in line with our future vision of greater prominence in the international policy arena by becoming ‘informed influencers’: taking CARE International’s evidence, underpinning it with rigorous policy analysis and presenting it in a compelling manner to the external world. We will focus our advocacy work on three areas: private sector engagement, food security and women in conflict.
We strengthened our capacity this year too, appointing a Head of Advocacy, to work alongside our senior policy advisor. On the one hand, we have been slower than expected in implementing our strategy, but on the other hand we have a much more solid base to underpin our work given the rigorous analysis and thinking we have gone through.
Realisation of the strategy will require significant change in the way we function. Improved policy analysis skills in the programme team and more materials developed with country offices and targeted at governments are just some of the strategic directions identified.
Our priorities for next year are to:
• deliver cross-organisational influencing strategies in the priority areas of private sector engagement and violence against women in conflict, targeted at our key audience groups • launch new research and policy web pages, and continue to improve our publications.
Raising profile and awareness We are focused on raising CIUK’s profile and awareness in order to have greater influence with our key audience groups, and to be able to raise more funds for our beneficiaries.
We have made good progress towards our key objective of increasing media coverage during the year and we have grown our voice in social networking channels. Our private sector engagement work and Lendwithcare have contributed to the overall 16% increase in our media coverage results and a 53% increase in the number of Twitter and Facebook followers over the year with the number of videos watched increasing by 67%.
Lendwithcare has received a very high level of positive PR including the Best New Website award in the Third Sector Excellence Awards 2011. It also delivered a big profile and reputation boost with our key audiences and, in Lendwithcare, we have a point of difference in the crowded UK media space. In particular, the launch of the new partnership between The Cooperative and Lendwithcare in August 2011 resulted in a major upsurge in profile, including articles inThe Guardian’s Money section and the Daily Mail.
Other media successes with Lendwithcare included:
• 118 interviews by celebrity Stacey Dooley on regional and national radio promoting Lendwithcare • LBC radio ran an interview with CARE ambassador and ITN newscaster, Alastair Stewart, following his visit in December 2011 to Bosnia Herzegovina to visit Lendwithcare entrepreneurs, which was also published in The Guardian and The Independent’s Money sections • Lendwithcare ambassadors Deborah Meaden from BBC2’s Dragon’s Den and TV presenter Kate Garraway also continued to help raise our profile through the media.
18 Defending Dignity. Fighting Poverty. Our objective to establish CIUK in opinion-forming media as leaders in microfinance and private sector engagement in development was evidenced by:
• a full-page interview with our Lendwithcare microfinance advisor in theFinancial Times • an article in The Economist on our Village Savings and Loans Groups • our Banking on Change partnership with Barclays and Plan UK winning the Third Sector Business Charity Award for Overseas Project 2012 • articles in The Guardian and The Economist covering our discussions on the JITA social enterprise scheme (see pages 8-9) at the Skoll World Forum, an annual gathering of 800 of the world’s most influential social entrepreneurs.
We have recruited a new Head of Communications and we have also nearly completed our work on reviewing our brand and identity as highlighted in our objectives from last year.
We will continue to focus on building our profile and reputation in the coming year, delivering our new communications and advocacy strategies with a more focused approach and greater ambition.
Our priorities for the year ahead are to:
• introduce an improved audience understanding to our marketing, advocacy and communications work, applying new key messages around three themes – emergencies and food security; women’s economic empowerment; and women and girls in conflict. • complete our major brand and communications review which will give us a stronger platform to engage with our key audiences and tell the story of our work • continue to increase media coverage, in particular coverage of our emergency response work, and focus on growing our voice in social networking forums • maximise the potential of Lendwithcare, and build significant growth and profile.
Linking into CARE International globally The last year has seen CIUK continue to be a major part of the CARE confederation, and our staff have been involved in all aspects of its work.
The CARE confederation has completed its work on ‘Vision 2020’ which presents what CARE wants to become by the year 2020 in order to best support poor people and have most impact, and is the start of the confederation’s work to define a new strategy for the next five years. The confederation has now developed a series of Vision statements across different areas of its work which all the members will aspire to. In the coming year, CIUK will need to assess how these best fit with our core roles as we develop our new strategic plan to replace our 2008-2013 strategy.
As part of the confederation, CIUK’s work has been extensive, and includes the following:
• we have assisted the country office reviews as we decide what focus for programmatic work best fits each country for the future • we have helped push forward with European CARE members to bring about greater efficiencies for the confederation – specifically agreeing to take a greater role within Europe and Brussels and bringing together European IT • we have been part of the management group focusing on emergencies and defining our emerging strategy • we have further developed our private sector engagement, conflict and governance work into centres of expertise for the confederation.
Annual Report and Accounts for the year ended 30 June 2012 19 In the coming year, we aim to help further develop and build CARE’s Vision 2020, assisting the confederation in taking forward its discussion regarding structure, and take a more active role with Brussels and the EC.
Becoming a more efficient and effective organisation Last year, we set our objectives as follows:
• to improve our contract management and compliance systems (and implement our new finance/grant and contract management system) • to improve our staff retention, talent management, and learning and development opportunities.
Over the past year, we have placed considerable effort on improving our contract management. We have changed line management in this area, and have focused on streamlining processes and procedures.
CARE International’s new financial management and grants system went live globally on 1 July 2012 and this will provide an integrated system across 56 countries, enabling us to share each other’s data more effectively. As with any new system, we are working through teething issues. However, in future, this will vastly improve the speed and probity of reporting, and our accountability to donors, through a strengthened control environment.
We have also completed a full salary review and implemented a new pay structure. We have given clear focus to staff retention and have developed a full talent management process.
We would like to thank Ashurst LLP for their continued support of CIUK by supplying pro bono legal assistance to us throughout the year.
Our priorities for the coming year are to:
• continue to implement our new finance and grant management system • continue to focus on improving our contract management processes and procedures to become more efficient • continue to focus on talent management, and learning and development opportunities.
20 Defending Dignity. Fighting Poverty. Lendwithcare We launched Lendwithcare (www.lendwithcare.org), our flagshipfl agship peerpeer toto peerpeer lendinglending initiative,initiative, inin SeptemberSeptember 2010.2010. TheThe year ended 30 June 2012 is the firstfi rst fullfull yearyear ofof activity.activity.
Lendwithcare allows people in the UK to lend small sums of money to entrepreneurs in developing countries to work their way out of poverty. Lenders are repaid in monthly instalmentsinstalments and,and, onceonce fullyfully repaid,repaid, areare thenthen ableable toto withdrawwithdraw theirtheir repayments,repayments, ‘invest’‘invest’ inin another entrepreneur or donate to CIUK’s work.
Lendwithcare is now sponsored by The Cooperative and, as of 30 June 2012, its supporters have made 27,088 loans to entrepreneurs with a value of £984,000.
Lendwithcare works with partner microfinancemicrofi nance institutionsinstitutions (MFIs)(MFIs) toto deliverdeliver loansloans toto entrepreneurs and, given that we charge no interest to the MFIs, they are then able to reach the poorest in the communities we work with. Default rates on repayment of loans have been zero so far.
Further information on how it works can be found at www.lendwith.care.org and the following diagram explains the Lendwithcare lending model:
7. You decide 1. The what happens Entrepreneur next has an idea
2. The 6. The Entrepreneur micro nance repays your loan institution (MFI) gives a loan
5. The Entrepreneur 3. The Entrepreneur grows their business appears on lendwithcare.org
4. You cover the loan
We are proud of this innovation and aim to grow this further, and faster, in the next few years.
Annual Report and Accounts for the year ended 30 June 2012 21
© Amy Vitale/CARE International © Amy
22 Defending Dignity. Fighting Poverty. Structure, governance and management
CARE International is one of the biggest International Non-Governmental Organisations (INGOs) in the world. CARE International works in 84 countries and its global expenditure each year is around US$750m. CARE International UK (CIUK) is the UK-based entity within this, providing around 10% of the confederation’s resource. In addition, we run a number of core skill technical areas on behalf of the whole of CARE International.
CARE International works through 1,015 major projects either directly or with local partners, and has over 11,000 employees – with 97% of these being citizens of countries where we work. Through its network of country offices, CARE International continues to provide high quality programme delivery and project management with funding from a wide range of institutional donors, governments and private funders. Geographically, CARE International operates in all major areas of need in the developing world, with the most significant amounts of programme expenditure in Asia and Africa.
CARE International is a non-sectarian and non-partisan organisation.
Structure of CARE International CARE International comprises 146 member organisations, separate national bodies which work within the principles and guidelines of the CARE International confederation. Each is represented on the CARE International Board.
All income, apart from that applied towards administrative support and fundraising costs, is directed towards anti-poverty programmes in the countries where CARE International works to alleviate poverty and its causes. The CARE International Secretariat based in Geneva provides coordination and administrative support to the confederation.
Together the members implement programmes through country offices. Each country office is administered by one ‘lead’ member (primarily CARE Australia, CARE Canada and CARE USA) on behalf of the membership. At the same time, individual members such as CIUK remain accountable for the direction and success of projects for which they have obtained funding and support. We also provide expertise to ensure the quality of projects and programmes.
In the view of the Board and of the management, CIUK is an operational charity and is not a grant-making body.
6 Australia, Austria, Canada, Denmark, France, Germany & Luxembourg, India, Japan, Netherlands, Norway, Peru, Thailand, UK and USA.
Annual Report and Accounts for the year ended 30 June 2012 23 Statement of public benefit The Trustees confirm that they have complied with the duty in the Charities Act 2011 to have due regard to the Charity Commission’s general guidance on public benefit, ‘Charities and Public Benefit’. That guidance addresses the need for all charities’ aims to be, demonstrably, for the public benefit.
CIUK’s objectives are to defend dignity and fight poverty for the poorest and most vulnerable people in the world. Our approach to fighting poverty in our key priority areas of private sector engagement, governance, conflict prevention and peace-building, and shelter in emergencies allows us to meet directly the following criteria for public benefit as defined by the Charity Commission guidance:
• the prevention or relief of poverty • the advancement of education • the advancement of health and the saving of lives • the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity • the advancement of environmental protection or improvement • the relief of those in need, by reason of gender, age, ill-health, disability, financial hardship or other disadvantage.
We have structured this report to highlight some of our achievements in each of our priority areas against the Charity Commission criteria listed above.
We are clear in our aims and objectives. We also take great care to ‘do no harm’ with our work. Internal systems and codes of governance across CARE International and the broader NGO community address this.
We aim to help the poorest and most marginalised members of society, and no person is excluded on the grounds of race, religion, gender, sexuality or social position. Any private benefit in our work is certainly incidental to our main objective – that of fighting poverty.
The detail in this Annual Report and Accounts highlights the impact of our work to lift people out of poverty. CIUK’s work helps millions of people each year.
Operational structure of CARE International UK
Governing body and governance The governing body of the Charity is the Board of Trustees. The Board meets formally five times a year, with significant other on-going involvement. In addition there are a number of standing committees and working groups:
• Finance and Audit Committee • Nominations and Remuneration Committee • Programme Committee; and • Marketing Working Groups.
These committees and working groups are made up of members of the Board and other independent individuals with relevant experience. All committees operate under specific terms of reference which delegate certain functions from the Board.
24 Defending Dignity. Fighting Poverty. Potential candidates for both the Board and Committee are recruited through an open and transparent process, including by advertisement in the national press and full display on the CIUK website. The Nominations and Remuneration Committee selects potential new members of the Board who are then approved by the full Board before appointment. Members of the Board and Committees serve for a three-year period and may be re-elected for a maximum of two further three-year terms.
A formal induction process is offered to Board and Committee members, comprising various meetings and presentations with executive staff as well as specific training from both UK staff and other CARE International members.
Statement of Trustees’ responsibilities
The Trustees (who are also directors of CIUK for the purposes of company law) are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and regulations. Company law requires the Trustees to prepare financial statements for each financial year. Under that law the Trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group for that period. In preparing these financial statements, the Trustees are required to:
• select suitable accounting policies and then apply them consistently • observe the methods and principles in the ‘Accounting and Reporting by Charities: Statement of Recommended Practice’ (SORP), issued by the Charity Commission • make judgments and accounting estimates that are reasonable and prudent • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable group will continue in business.
The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as each of the Trustees is aware:
• there is no relevant audit information of which the charitable company’s auditors are unaware • the Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the UK, governing the preparation and dissemination of financial statements, may differ from legislation in other jurisdictions.
Annual Report and Accounts for the year ended 30 June 2012 25 Internal controls
The Trustees have overall responsibility for ensuring that the Charity has an appropriate system of control, financial and otherwise. They are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the Financial Statements comply with the Companies Act 2006.
The systems of internal control are designed to provide assurance against material misstatement or loss. They include:
• a five-year strategic and business plan, which has been reviewed after three years, a linked annual operating plan and an annual budget all approved by the Board • regular monitoring of Key Performance Indicators (KPIs) focused on the six roles we play within the confederation, and a full implementation plan developed from the strategic plan • regular consideration by the Board of financial results and variance from budgets • the use of Committees in meeting their duties and delegating certain functions of the Board • appropriate identification and management of risk • internal auditing, as carried out in accordance with the CIUK Audit Charter, focused on overseas projects and CIUK processes and procedures.
As part of this process, Trustees continue to review the adequacy of the Charity’s internal controls. They consider whether controls are sufficient on an annual basis. In the interim they discharge their responsibility to the Finance and Audit Committee which reviews the control environment annually.
Risk management CIUK is committed to a risk management process and accordingly the position of Head of Internal Audit and Risk Management reports through the Finance and Audit Committee to the Board. The role ensures that a formal process to assess business risks and implement appropriate risk management strategies is carried out on a regular basis.
Various types of risks faced by the Charity are identified and prioritised in terms of their potential impact and likelihood of occurrence. The key risks identified are as follows:
• CIUK manages projects through our country offices. As such, we spend significant effort on managing these remotely. Our risk is that projects fail to spend as expected, e.g. due to natural weather cycles. Equally we have a risk when working with local NGOs as partners, that they maintain adequate internal controls and maintain proper control over projects. We are working to ensure that projects continue to spend as per plans to ensure donor confidence and effective overhead recovery. Equally we work with our country offices to ensure regular review of local NGO activities, and also capacity building to help local NGOs become more effective partners. • CIUK has a much lower balance of unrestricted to restricted income compared to similar NGOs. This means unrestricted income is precious. One of our major risks is that we do not have sufficient flexible unrestricted funds to meet our ambitions. We are focused on addressing this as part of our strategic plan. • Foreign exchange rate fluctuations bring risk to our financial position given the recent volatility in both the Euro and Sterling. We are using basic financial instruments and joint treasury management across the confederation to mitigate this risk.
26 Defending Dignity. Fighting Poverty. • We have a major risk when we handle large amounts of funds in emergency contexts, which is in line with other NGOs. Scaling up, proper fund management and resourcing quickly are all risks. We have a wide range of mitigating controls to reduce this risk. • There is a risk to our organisation as we focus on different modalities of delivering our work. Specifically, DFID’s recent move towards payments by results and also the potential change in PPA (Partnership Funding) are risks.
A review of all risks, and progress against mitigating these, is completed quarterly by a risk committee comprising senior staff members and their work, in turn, is reviewed half-yearly by the Finance and Audit Committee which reports to the Trustees. The Board formally considers risk on an annual basis.
In accordance with the CIUK Charter, a Risk Based Assessment of Audit Need (RBANA) is used to plan annual internal audit work. As part of this process the organisation has been divided into distinct business areas and audit priority is given to each of these areas based on a risk indicator. Some of the factors taken into account when determining risk are results of prior audits, volume of transactions, and total value of transactions. Country offices are also included in this risk assessment.
The Head of Internal Audit and Risk Management is sufficiently independent, with unrestricted access to both the Finance and Audit Committee, and the Boards of CIUK and CARE International. The Board believes that the Charity’s internal financial controls conform to good practice and guidelines issued by the Charity Commission.
Equal opportunities policy CIUK is an equal opportunities employer and applies objective criteria to assess merit. It aims to ensure that no job applicant or employee receives less favourable treatment on the grounds of age, race, colour, nationality, religion, ethnic or national origin, gender, marital status, sexual orientation or disability. Selection criteria and procedures are in place to ensure that individuals are selected, promoted and treated on the basis of their relevant abilities and merits.
Annual Report and Accounts for the year ended 30 June 2012 27 Financial review
The Financial Statements have been prepared in accordance with the accounting policies set out on pages 37 to 39 of the attached Financial Statements and comply with provisions of the Companies Act 2006, applicable laws and the requirements of the ’Accounting and Reporting by Charities: Statement of Recommended Practice’ (SORP), issued by the Charity Commission.
Results in overview The previous year saw a large amount of emergency activity and this drove exceptional income and expenditure levels. This year saw income and expenditure fall back against prior year levels for emergencies, but all other income has remained broadly consistent or, in the case of development income and funding for our advocacy work, has increased.
Our pipeline for next year is solid and reflects focus by CIUK to grow this. We have also brought together Programmes and Marketing teams into one unit to drive this.
Our reserves continue to sit within the bounds laid down by the Trustees to guarantee future financial robustness, and the Charity is on a sound financial footing. We have plans to return to the upper end of the reserve policy in next year’s budget.
A key distinction in the charity sector is between restricted income, given for the purpose specified by the donor, and unrestricted income, which may be used by the Charity for its general purposes to fulfil its charitable objectives. The overall results show a £3.2m deficit for the year (2011: £3.8m surplus) being the result of two forces:
• an unrestricted deficit of £0.2m as we have continued to invest some of our unrestricted reserves in marketing and fundraising to increase future unrestricted income • a restricted £3.0m deficit where we have spent money against our emergency work.
Income The Charity’s total income for the year was £43.7m (2011: £51.2m), a decrease of 15% on the previous financial year. This decrease is almost entirely due to the reduced level of emergency activity, and because our short-term humanitarian response in Pakistan came to an end.
Our income from private donors fell back slightly because of a low level of legacies and as we pro-actively held back on certain appeals which were not making sufficient return in this difficult economic environment. This income from private donors is the main source of unrestricted funding for CIUK.
Overall, our income from non-institutional sources stayed level against the previous year. This is a good result, set against the global economic downturn.
During the year, we received £4.0m (2011: £5.5m) from DFID for the Partnership Programme Agreement (PPA), an important strategic element of our work to understand better some of the root causes of poverty. This allows us to share with DFID, and the wider NGO community, findings from a number of key focus areas including private sector engagement, governance and conflict. We have been identified as one of the best examples of PPA use by DFID in their evaluation of the previous tranche of PPA funding, PPA3.
28 Defending Dignity. Fighting Poverty. Expenditure The total expenditure on charitable objectives for the year ended 30 June 2012 was £42.5m (2011: £43.1m).
Of these funds the split between our emergencies and humanitarian relief work versus our long- term development work was 43%:57% (2011: 46%:54%). Again our response to large-scale emergencies has influenced trends heavily. The percentage breakdown of programme-based expenditure is shown below.
3% 1% 12% Emergency Relief (Humanitarian): 43% Emergency Relief (Development): 13% 43% 10% Conflict: 4% Governance: 14% Private Sector Engagement: 10%
14% Secondary Themes (inc. HIV/Climate Change): 12% Other Development Projects: 3% 4% Advocacy: 1% 13%
CIUK has a global presence delivering large programmes of work in each geographical region, and Asia is where the majority (47%) of our work has been focused in 2012:
13% 27%
8% Africa: 27% Asia: 47% 5% Latin America: 5% Europe and Middle East: 8% Global Projects: 13% 47%
Annual Report and Accounts for the year ended 30 June 2012 29 Financial risk The Charity’s unrestricted income is mainly sensitive to changes in PPA income, donor marketing and overhead recovery on contracts. We are also dependent on ensuring we spend appropriately against project plans for our overhead recovery. We monitor these risks closely through the Senior Management Team and Finance and Audit Committee.
Cashflow risks are minimised by retaining an appropriate reserves policy, which covers cashflow for our activities, but also any bank guarantees.
Reserves policy Unrestricted reserves are defined as general funds and are available to enable CIUK to meet its objectives. Net free reserves are defined as unrestricted reserves less the net book value of the tangible fixed assets.
The aim of a reserves policy is to ensure that a charity’s on-going and future activities are reasonably protected from unexpected financial risk. This may include:
• unexpected increase or decrease in funding streams • the need to maintain funds to meet cashflow needs • the need to maintain specific funds to meet unexpected one-off expenditure impacts.
Following a review in September 2012, the Trustees set a new reserves policy of net free reserves between £1.2m and £1.5m.
Currently, our net free reserves equate to £1.361m as representing nearly 5.5 months’ essential expenditure. We are budgeted to return our reserves to £1.5m by the end of the next year.
The following graph shows our unrestricted net free reserves. The two horizontal lines show the upper and lower level of reserves that we aim for under our reserves policy. The lighter bar (2013) shows next year’s budgeted reserves.
2.5
2.0
1.5
£m 1.0
Budget 0.5
0.0 2006 2007 2008 2009 2010 2011 2012 2013
At 30 June 2012 our restricted reserves were £10.3m (2011: £13.3m). This represents committed funds en-route to their final destination in the communities in which CIUK works. We spend these funds on project-based activities and the reduction in restricted fund levels represent the fact that we have spent against planned project budgets, whereas last year we had drawn down funds in advance of humanitarian assistance to Pakistan, Liberia and the Horn of Africa.
30 Defending Dignity. Fighting Poverty. In the highly unlikely event of any such funds not being able to be used for their intended purposes in their entirety, any balance would be returned to the original donors.
Because the majority of our funds are donor funds en-route to projects, the Board has taken the decision to keep this in cash and not invest these for the long-term.
Trading subsidiary The Charity’s wholly owned subsidiary carries out trading activities for the Charity. These activities provided a surplus of £108,000 (2011: £108,000).
Thanks to all supporters, staff and volunteers
We will continue to promote lasting change in poor communities around the world. This year, CARE International expects to touch the lives of over 122 million people. We will continue to concentrate on the deep-seated causes of poverty to ensure lasting change.
This would not be possible without the dedicated support and hard work of our staff, supporters and volunteers.
On behalf of the Board, Also signed by,
Oliver Stocken Geoffrey Dennis Chair of Trustees Chief Executive 18 October 2012 18 October 2012
Annual Report and Accounts for the year ended 30 June 2012 31 Independent auditor’s report to the members of CARE International UK
We have audited the financial statements of CARE International UK for the year ended 30 June 2012 which comprise the Consolidated Statement of Financial Activities, the Group and Parent Charitable Company Balance Sheets, the Consolidated Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of trustees and auditor As explained more fully in the Trustees’ Responsibilities Statement set out on page 25, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements In our opinion the financial statements:
• give a true and fair view of the state of the group’s and the parent charitable company’s affairs as at 30 June 2012 and of the group’s incoming resources and application of resources, including its income and expenditure, for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Trustees’ Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
32 Defending Dignity. Fighting Poverty. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent charitable company, or returns adequate for our audit have not been received from branches not visited by us; or • the parent charitable company financial statements are not in agreement with the accounting records or returns; or • certain disclosures of Trustees’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit.
Carol Rudge Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered Accountants London
18 October 2012
Annual Report and Accounts for the year ended 30 June 2012 33 Consolidated statement of financial activities (Incorporating an Income and Expenditure Account)
For the year ended 30 June 2012 2012 2012 2012 2011 Unrestricted Restricted Total Total funds funds funds funds Notes £’000 £’000 £’000 £’000 Incoming resources
Incoming resources from generated funds Voluntary income 4,114 6,637 10,751 10,970 Donations and sponsorships 2 3,962 6,637 10,599 10,599 Legacies 152 - 152 371 Activities for generating funds 796 5 801 820 Fundraising events 615 5 620 682 Trading income 181 - 181 138 Investment income 21 4 25 23
Incoming resources from charitable activities 2 2,397 29,583 31,980 39,227 Other income 120 - 120 130 Total incoming resources 12 7,448 36,229 43,677 51,170
Cost of generating funds Fundraising costs 3 4,032 25 4,057 3,908 Trading costs 58 - 58 24 Total cost of generating funds 4,090 25 4,115 3,932
Charitable activities 4 Emergency and humanitarian relief 1,347 17,019 18,366 19,822 Development work 1,713 21,702 23,415 22,936 Advocacy 164 541 705 340 Total charitable activity costs 3,224 39,262 42,486 43,098
Governance 5 311 - 311 286 Total resources expended 7,625 39,287 46,912 47,316
Net (outgoing)/incoming and net expenditure (177) (3,058) (3,235) 3,854
Funds balances brought forward 1,874 13,313 15,187 11,333 Funds balances carried forward 1,697 10,255 11,952 15,187
The results for the year shown above all derive from continuing operations. There are no recognised gains or losses for the year other than those shown above.
There are no material differences between the results for the year as stated above and those calculated on a historical cost basis.
34 Defending Dignity. Fighting Poverty. Group and charity balance sheet
For the year ended 30 June 2012 Group Group Charity Charity 2012 2011 2012 2011 Notes £’000 £’000 £’000 £’000
Fixed assets Tangible assets 8 336 204 336 204 Investments 9 37 41 37 41 373 245 373 245
Current assets Debtors 10 8,926 11,410 8,931 11,463 Cash at bank & in hand - general funds 1,502 2,188 1,494 2,133 Cash at bank & in hand - overseas projects 5,845 8,135 5,845 8,135 16,273 21,733 16,270 21,731 Creditors: amounts falling due within one year 11 (4,694) (6,641) (4,691) (6,639)
Net current assets 11,579 15,092 11,579 15,092
Total assets less current liabilities 11,952 15,337 11,952 15,337
Provision for liabilities 14 - (150) - (150)
Net assets 11,952 15,187 11,952 15,187
Represented by Restricted funds 12 10,255 13,313 10,255 13,313 Unrestricted funds 12 1,697 1,874 1,697 1,874 Total 13 11,952 15,187 11,952 15,187
The accompanying notes on pages 37 to 48 form an integral part of these Financial Statements.
Signed on behalf of the Board of the Trustees by:
Oliver Stocken William Macpherson Chair of Trustees Chair, Finance and Audit Committee 18 October 2012 18 October 2012
Registered company number: 1911651
Annual Report and Accounts for the year ended 30 June 2012 35 Consolidated cashflow statement
For the year ended 30 June 2012 Group Group 2012 2011 Notes £’000 £’000
Net cash (outflow) / inflow from operating activity 18a (2,782) 2,486
Returns on investment and servicing of finance 18b 25 23
Capital expenditure and financial investment 18c (219) (235) (2,976) 2,274
Financing - -
(Decrease) / Increase in cash in the year (2,976) 2,274
Reconciliation of net cash flow to movement in net funds
(Decrease) / Increase in cash in the year (2,976) 2,274
Movement in net funds in the year (2,976) 2,274
Net funds at the beginning of the year 10,323 8,049
Net funds at the end of the year 18d 7,347 10,323
36 Defending Dignity. Fighting Poverty. Notes to the accounts
For the year ended 30 June 2012 1. Accounting policies a) Basis of preparation The Financial Statements are prepared under the historical cost convention and in accordance with the ‘Accounting and Reporting by Charities: Statement of Recommended Practice’ (SORP), issued by the Charity Commission, and applicable UK accounting standards.
The Statement of Financial Activities (SOFA) and Balance Sheet consolidate the Financial Statements of the Charity and its subsidiary undertaking. The results of the subsidiary are consolidated on a line by line basis. No separate SOFA has been presented for the Charity alone as permitted by Section 408 of the Companies Act 2006.
The Accounting Policies are consistent with the previous year, and have been prepared on a going concern basis.
The financial statements of CIUK’s trading subsidiary company, CI Enterprises Limited, are consolidated with the accounts of CIUK on a line by line basis. b) Incoming resources All incoming resources are included in the SOFA when the Charity is entitled to the income and the amount can be quantified with reasonable accuracy and receipt is virtually certain.
All income is considered unrestricted unless specifically restricted by the donor, or raised in an appeal for a specific purpose.
Income is only deferred when the Charity has to fulfil conditions before becoming entitled to it or where the donor or funder has specified that the income is to be expended in a future accounting period.
Grants receivable based on performance are accounted for as the Charity earns the right to consideration by its performance. Where income is received in advance of performance its recognition is deferred and included in creditors. Where entitlement occurs before income is received the income is accrued. c) Contributions in kind Contributions and donations in kind are recorded at fair values on the date of contribution. d) Resources expended All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to that category. Where costs cannot be directly attributed to particular headings, where practicable, they have been allocated to activities on a basis consistent with use of the resources. Central overhead costs are allocated to operational and fundraising functions on the basis of their use of support services measured by direct cost.
Annual Report and Accounts for the year ended 30 June 2012 37 NOTES TO THE ACCOUNTS For the year ended 30 June 2012 CIUK sub-contracts its work to CARE country offices, but continues to provide effective management and oversight over these. As such we account for our project work as an operational charity, and our expenditure reflects funds utilised by country offices.
Fundraising costs are those incurred in seeking voluntary contributions and include the costs of disseminating information in support of the charitable activities.
Governance costs are those which relate to the provision of the governance infrastructure of the Charity as opposed to those costs associated with fundraising or charitable activity. Included within this category are costs associated with the strategic as opposed to day-to-day management of the Charity’s activities. They also include all Trustee and committee costs.
Irrecoverable VAT is not separately analysed and is charged to the SOFA when the expenditure to which it relates is incurred, and is allocated as part of the expenditure to which it relates.
e) Property and equipment Non-programme expenditure of more than £1,000 per item for buildings, equipment and leasehold improvements is capitalised at cost. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets as follows:
Leasehold improvements over the remaining life of the lease IT equipment 3 years Other equipment 7 years
f) Finance and operating leases Rentals paid under operating leases are charged to the SOFA on a straight-line basis over the term of the lease.
Assets purchased under finance leases are capitalised as fixed assets. Obligations under such agreements are included in creditors. The difference between the capitalised cost and the total obligation under the lease represents the finance charges. Finance charges are written-off to the SOFA over the period of the lease at a constant proportion of the balance of capital repayments outstanding.
g) Fund accounting Unrestricted funds comprise funds available for use at the discretion of the Board in furtherance of the general objectives of the Charity.
Restricted funds are funds subject to specific restrictions imposed by donors or by the purpose of the appeal under which they were raised.
h) Investments Investments held as cash deposits denominated in foreign currency are translated into UK sterling at the rate of exchange prevailing at the balance sheet date. Differences arising on currency translation are expressed as movements in the market value of investments.
38 Defending Dignity. Fighting Poverty. NOTES TO THE ACCOUNTS For the year ended 30 June 2012 i) Foreign currencies Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the net movement in funds. j) Pensions Contributions to the defined contribution pension scheme are recognised in the SOFA when they are payable. The money purchase nature of the scheme assures there will be no funding deficit or surplus accruing to the Charity in the future. The pension scheme is independently administered and the assets of the scheme are held separately from those of the Charity.
The Charity also participates in the Pensions Trust Growth Plan, a multi-employer pension scheme where it is not possible to separately identify the assets and liabilities of participating employers. This is a money purchase arrangement but it has some historical guarantees. These Financial Statements include pension costs payable on a defined contribution basis in accordance with Financial Reporting Standard 17, Retirement Benefits. The current overall position of the fund and the assumptions made are provided in note 22. k) Taxation As a registered charity, CIUK is exempt from taxation of income and gains to the extent these are applied to charitable objectives.
2. Consolidated incoming resources 2012 2012 2012 2011 Unrestricted Restricted Total Total funds funds funds funds £’000 £’000 £’000 £’000 Donations and sponsorship Individuals 3,447 190 3,637 3,502 Charitable foundations 22 568 590 1,090 Corporate donors 330 4,260 4,590 2,193 Disasters Emergency Committee (DEC) 163 1,619 1,782 3,814 Total 3,962 6,637 10,599 10,599
From charitable activities Department For International Development (DFID) 908 13,447 14,355 17,471 DFID Partnership Programme Agreement (PPA) 400 3,649 4,049 5,541 European Union (EU) 373 4,773 5,146 4,481 European Community Humanitarian Office (ECHO) 387 3,544 3,931 9,694 Big Lottery Fund - EMPHASIS Development Grant - 1,046 1,046 798 Other 329 3,124 3,453 1,242 Total 2,397 29,583 31,980 39,227
Annual Report and Accounts for the year ended 30 June 2012 39 NOTES TO THE ACCOUNTS For the year ended 30 June 2012 2a. Included in the above are the following projects 2012 2012 2012 2011 Unrestricted Restricted Total Total funds funds funds funds Donor Project Name £’000 £’000 £’000 £’000
DFID ART Adherence Research in Zambia 4 161 165 263 DFID Bihar Health Sector Reform (II) in India 66 3,100 3,166 3,108 DFID CBHA Partnership - - - 57 DFID Child & Maternal Health in Sierra Leone - - - (64) DFID Cholera Response in Cameroon - - - 134 DFID Conflict Management in Somalia - - - 82 DFID Conflict Sensitivity in Sri Lanka - 52 52 127 DFID Disaster Risk Reduction (II) in Niger - - - 1,015 DFID Emergency Response in West Africa - 1 1 228 DFID Emergency WASH at Dadaab Camp, Kenya 41 579 620 - DFID ENCISS Media Support in Sierra Leone - - - 43 DFID ENCISS Project in Sierra Leone 2 (2) - 954 DFID Flood Response in Benin - 26 26 274 DFID Global Climate Change – Adaptive Learning 72 1,003 1,075 660 DFID Global Conflict Sensitivity 21 271 292 531 DFID Humanitarian Assistance in Sri Lanka - - - 50 DFID Hunger Safety Net in the Horn of Africa - 61 61 157 DFID Integrated Emergency Response Programme for Yemen Phase I (8) (71) (79) 2,000 DFID Integrated Emergency Response Project for Yemen Phase II 2011 – 2012 153 3,209 3,362 - DFID Integrated Emergency Response Programme for Yemen Phase III 2012-2013 - 1,588 1,588 - DFID Malnutrition & Pastrolism in Niger - (27) (27) 647 DFID Measuring for Impact in Conflict, Crime and Violence Consortium 5 70 75 - DFID MicroFinance Innovation Fund in Zimbabwe 14 113 127 73 DFID Protracted Relief Programme in Zimbabwe Phase I 116 1,262 1,378 - DFID Protracted Relief Programme in Zimbabwe Phase II (1) 46 45 982 DFID Shelter Deployment in Haiti 17 (2) 15 274 DFID Supporting Refugees in Ivory Cost 38 537 575 325 DFID Training of Mothers Groups to Support Girls Education 6 (5) 1 152 DFID WASH in Pakistan 65 (65) - 1,999 DFID Xoojinta Nabada (Strengthening Peace) Project in Somalia 20 350 370 - Total 631 12,257 12,888 14,071
The table provides details of balances only on certain DFID projects where the contractual terms require such disclosure.
40 Defending Dignity. Fighting Poverty. NOTES TO THE ACCOUNTS For the year ended 30 June 2012 3. Fundraising costs 2012 2012 2012 2011 Unrestricted Restricted Total Total funds funds funds funds £’000 £’000 £’000 £’000
Individuals 2,717 18 2,735 2,746 Institutional and Foundations 211 - 211 103 Corporate donors 289 7 296 210 Fundraising events 233 - 233 292 Communication costs 397 - 397 378 Support costs (Note 6) 185 - 185 179 Total 4,032 25 4,057 3,908
4. Charitable activities Emergency & Development Advocacy 2012 2011 Humanitarian Relief Activities Total Total £’000 £’000 £’000 £’000 £’000
Emergency & humanitarian relief 15,733 5,034 79 20,846 23,666 Core development areas: Private sector engagement 10 3901 37 3,948 2,710 Governance - 5366 2 5,368 7,378 Conflict - 1443 - 1,443 2,196 Secondary themes: HIV / climate change 1110 4638 363 6,111 2,773 Other development projects 166 1320 - 1,486 1,219 Advocacy - - 60 60 223 Other direct costs (unattributed) 526 670 141 1,337 934 Support costs (Note 6) 821 1,043 23 1,887 1,999 Total charitable activity costs 18,366 23,415 705 42,486 43,098
Expenditure was incurred in the following geographic areas: Emergency & Development Advocacy 2012 2011 Humanitarian Relief Activities Total Total £’000 £’000 £’000 £’000 £’000
Africa 4,482 6,654 51 11,187 10,532 Asia 7,463 11,332 341 19,136 18,441 Europe & Middle East 2,962 119 - 3,081 2,997 Latin America 381 1,542 13 1,936 4,873 Other 2,257 2,725 277 5,259 4,256 Support costs (Note 6) 821 1,043 23 1,887 1,999 Total 18,366 23,415 705 42,486 43,098
Annual Report and Accounts for the year ended 30 June 2012 41 NOTES TO THE ACCOUNTS For the year ended 30 June 2012 5. Governance costs Total Total 2012 2011 £’000 £’000 Internal audit (in house) 81 69 External audit 39 44 Trustees’ expenses 38 28 Trustees’ indemnity insurance 3 4 Apportionment of senior management costs 142 133 Company secretarial 8 8 Total 311 286
6. Support costs Office Finance Human Total Total Management costs & IT resources 2011 2010 £’000 £’000 £’000 £’000 £’000 £’000 Charitable activities Emergency & humanitarian relief 164 222 314 121 821 922 Development work 208 282 400 153 1,043 1,066 Advocacy 4 7 10 2 23 11 376 511 724 276 1887 1,999
Cost of generating funds Fundraising costs 37 50 71 27 185 179 Total 413 561 795 303 2,072 2,178
7. Staff costs Total 2012 Total 2011 £’000 £’000
Wages & salaries 3,775 3,335 Social security costs 403 348 Pension costs 169 161 Other staff costs 172 172 Total 4,519 4,016
The average number of UK employees was: 2012 Number 2011 Number Programme and programme support 51 49 Marketing 35 30 Management and administration 23 22 Total 109 101
In addition to full-time permanent staff, CIUK employed a small number of temporary staff at a cost of £43,652 (2011: £49,405) and made use of local staff in overseas offices where CIUK projects are implemented.
The number of employees whose emoluments in the year as defined for taxation purposes amounted to over £60,000 was as follows:
2012 2011 No. No. £60,001 - £70,000 1 1 £70,001 - £80,000 2 1 £100,001 - £110,000 1 1
42 Defending Dignity. Fighting Poverty. NOTES TO THE ACCOUNTS For the year ended 30 June 2012 Employer contributions are made to a money purchase scheme in respect of four higher paid employees (2011: three). Total employer contributions in respect of higher paid employees during the year amount to £24,393 (2011: £18,006).
None of the members of the Board received any remuneration (2011: Nil). Expenses reimbursed to members for travel undertaken on the Charity’s behalf amounted to £4,017 for three members (2011: £29,796 for twelve members).
The Charity paid £3,180 (2011: £3,833) for Trustees’ Indemnity Insurance cover of £3.5m (2011: £3.5m).
8. Tangible fixed assets Group and Charity Leasehold Office IT improvements equipment equipment Total £’000 £’000 £’000 £’000 Cost At 1 July 2011 469 251 596 1,316 Additions 131 36 52 219 Disposals (399) (204) (484) (1087) At 30 June 2012 201 83 164 448
Depreciation At 1 July 2011 398 204 510 1,112 Charge for the year 20 12 55 87 Disposals (399) (204) (484) (1087) At 30 June 2012 19 12 81 112
Net book values At 30 June 2012 182 71 83 336
At 30 June 2011 71 47 86 204
9. Investments Group and Charity £’000 Market value At 1 July 2011 41 Movement in year (4) At 30 June 2012 37 a) Subsidiary company Investments held by the Charity include a £2 (2011: £2) investment in the subsidiary company at cost. The Charity holds 100% of the issued share capital of CI Enterprises Limited, which is registered in England and Wales. The company’s principal activity is to undertake trading for the Charity. A summary of the subsidiary’s results and its position at 30 June 2012 is given in note 16. b) CARE International During the year, the Charity participated in the Revolving Fund established with other members of the CARE International confederation, maintaining its investment of EURO 45,500. The Fund, which is administered by the CARE International Secretariat in Geneva, is used to provide short- term interest-bearing loans to finance projects across CARE International.
Annual Report and Accounts for the year ended 30 June 2012 43 NOTES TO THE ACCOUNTS For the year ended 30 June 2012 10. Debtors Group Group Charity Charity 2012 2011 2012 2011 £’000 £’000 £’000 £’000
Due from EU/ECHO 2,970 3,260 2,970 3,260 Due from DFID 2,534 5,073 2,534 5,073 Due from other donors 417 - 417 - Due from other CARE International offices 58 78 58 78 Sundry debtors 100 147 76 128 Due from subsidiary undertaking - - 29 72 Prepayments and accrued income 1 172 1 172 Project balances held overseas in country offices 2,846 2,680 2,846 2,680 Total 8,926 11,410 8,931 11,463
Project balances held overseas represent monies transferred to other CARE International offices but not yet expended. Likewise, a programme creditor is where money has been expended by other CARE International offices in advance of funding and we are entitled to recover this money.
11. Creditors: amounts falling due within one year
Group Group Charity Charity 2012 2011 2012 2011 £’000 £’000 £’000 £’000
Programme creditors and other CARE offices 2,474 5,683 2,474 5,683 Suppliers - 261 - 261 Taxation and social security 116 106 115 106 Sundry creditors 26 34 26 34 Accruals 135 265 133 263 Deferred income 1,943 292 1,943 292 Total 4,694 6,641 4,691 6,639
12. Consolidated statement of funds
1 July Incoming Resources 30 June 2011 resources expended 2012 £’000 £’000 £’000 £’000 Restricted funds Africa 2,539 10,175 11,187 1,527 Asia 7,149 14,282 19,136 2,295 Europe and Middle East 284 3,181 3,081 384 Latin America 985 1,729 1,936 778 Other 2,356 6,862 3,947 5,271 Total restricted funds 13,313 36,229 39,287 10,255
Unrestricted funds General funds 1,874 7,448 7,625 1,697 Total unrestricted funds 1,874 7,448 7,625 1,697
Total funds 15,187 43,677 46,912 11,952
Restricted funds are those project balances held on behalf of institutional donors, trust funds, corporate entities and foundations for future work.
44 Defending Dignity. Fighting Poverty. NOTES TO THE ACCOUNTS For the year ended 30 June 2012 13. Analysis of net assets between funds
Group Fixed Current Current Long-term Total Assets Assets Liabilities Liabilities £’000 £’000 £’000 £’000 £’000 Restricted funds - 14,612 (4,357) - 10,255 Unrestricted funds 373 1,661 (337) - 1,697 Total 373 16,273 (4,694) - 11,952
14. Provision for liabilities Group & Charity £’000 Provision at 1 July 2011 150 Released in the Period (150) Provision at 30 June 2012 -
The provision for dilapidations to our former UK premises at 10-13 Rushworth Street, London SE1 0RB was utilised in FY12 as we moved buildings to our new premises.
15. Commitments
Land and buildings Equipment Group and Group and Group and Group and Charity Charity Charity Charity 2012 2011 2012 2011 £’000 £’000 £’000 £’000 Operating leases expiring - within one year - - - 2 - within two to five years - - 5 4 - over five years 156 156 - - Total 156 156 5 6
16. Subsidiary company The Charity owns the whole of the issued ordinary share capital of CI Enterprises Ltd, a company registered in England and Wales (Company number 2306212). The subsidiary is used for trading activities to provide income for the Charity. The company’s main activities during the year were the provision of IT support to five European CARE International offices and one external charity, and receiving royalties for book sales.
CI Enterprises Ltd 2012 2011 £’000 £’000 Total trading income 181 138 Cost of sales (73) (30) Gross profit 108 108
Administrative expenses - (2) Profit before charitable donations and taxation 108 106
Charitable donation (108) (106) Net profit/(loss) - -
The aggregate of the assets and liabilities were: Assets 32 74 Liabilities (32) (74) Funds - -
Annual Report and Accounts for the year ended 30 June 2012 45 NOTES TO THE ACCOUNTS For the year ended 30 June 2012 17. Lendwithcare Lendwithcare (www.lendwithcare.org) is a peer to peer lending relationship between people in the UK and people in the developing world. It is an innovative way of raising microfinance to help entrepreneurs in developing countries lift themselves out of poverty.
An explanation of the workings of the scheme is given on page 21 of the Trustees’ report.
We disclose the value of loan capital loaned from inception of Lendwithcare to date. This includes figures for amounts that have been re-loaned as part of the scheme, and is different from balances held in trust for lenders at any point in time.
These balances do not form part of the assets of CIUK and are not consolidated within the financial statements.
The operating costs of the scheme, income derived from donations, and similar income due to CIUK from this scheme are consolidated in the financial statements and its notes and not separately disclosed.
Lendwithcare capital account 2012 2011 £’000 £’000
Opening Capital at 1 July 100 5 Movements during the year 571 95 Closing Balance at 30 June 671 100
Lendwithcare total loan capital since inception The total amount of funds lent and re-loaned to entrepreneurs since inception of the scheme:
2012 2011 £’000 £’000 Loan Capital since inception 984 130
46 Defending Dignity. Fighting Poverty. NOTES TO THE ACCOUNTS For the year ended 30 June 2012 18. Notes to the consolidated cashflow statement 2012 2011 £’000 £’000 a) Reconciliation of net incoming resources to net cash (outflow)/inflow from operating activities Net incoming resources for year (3,235) 3,854 Interest receivable (25) (23) Interest payable - - Operating surplus (3,260) 3,831
Depreciation charges /investment written off 91 163 Increase in debtors 2,484 (1,594) Increase in creditors and provisions (2,097) 86
Net cash flow from operating activities (2,782) 2,486 b) Returns on investment and servicing of finance Interest received 25 23 Interest paid - - Net cash inflow 25 23 c) Capital expenditure and financial investment Purchase of tangible fixed assets & investments (219) (235) Net cash outflow (219) (235) d) Analysis of changes in cash At 30 June 2011 Cash flow Foreign exchange At 30 June 2012 £’000 £’000 £’000 £’000 Cash at bank and in hand 10,323 (2,800) (176) 7,347 Total funds 10,323 (2,800) (176) 7,347
19. Contingent liabilities There are no contingent liabilities at 30 June 2012 (2011: none).
20. Related party transactions The Charity is a member of the Disasters Emergency Committee (DEC) and in the year paid a subscription of £29,932 (2011: £26,836). In addition, CIUK’s Chief Executive is a Trustee of the DEC. The Charity receives funds from DEC appeals and amounts received and receivable in the year were £1.78m (2011: £3.81m).
The Management Centre, for which Angela Cluff is an employee, undertook work on behalf of the CARE International confederation during the year. Angela is a Trustee of CIUK and, while strictly not necessary, this work is disclosed for the sake of transparency.
21. Taxation CARE International UK is a registered charity and is not liable therefore to income tax or corporation tax on income derived from its charitable activities, as it falls within the various exemptions available to registered charities. Irrecoverable VAT is charged to its associated expenditure.
Annual Report and Accounts for the year ended 30 June 2012 47 NOTES TO THE ACCOUNTS For the year ended 30 June 2012 22. Pension costs The Charity participates in a defined contribution scheme and a multi-employer scheme administered by The Pensions Trust. Contributions to the multi-employer scheme paid into The Pension’s Trust Growth Plan up to and including September 2001 have been converted to defined amounts of pension payable from Normal Retirement Date. From October 2001, contributions were invested in personal funds which have a capital guarantee and which are converted to pension on retirement, either with the Growth Plan or by purchasing an annuity.
Following a change in legislation in September 2005, there is technically a potential liability to CIUK that could be levied by the Trustees of the Plan, which would apply to employers with pre-October 2001 liabilities in the Plan. If Plan liabilities exceed assets, a buy-out debt will exist if CIUK withdraws all employees from the scheme. The leaving employer’s share of the buy-out debt is the proportion of the Plan’s pre-October 2001 liability attributable to employment with the leaving employer compared with the total amount of the Plan’s pre-October 2001 liabilities. Given the number of factors to be considered in determining the liabilities the debt can fluctuate over time.
The Pensions Trust has advised that an employer will only be deemed to have withdrawn if it has no active members remaining in the Plan and no eligible employees to whom to offer membership to the Plan. The Pensions Trust estimates that the liability of CIUK on withdrawing from the plan would be £918,040 (2011: £663,764) based on the financial position of the Plan at 30 September 2011. The chance of this debt crystallising is considered remote.
The Charity continues to offer membership of the Plan to its employees and contributions to the schemes for the year were £169,000 (2011: £161,000). The employer’s and employees’ rates are 7.5% and 4% respectively.
Advisors
Auditors Bankers Solicitors Grant Thornton UK LLP Barclays Bank plc HSBC plc Ashurst LLP Grant Thornton House Level 28 UK City of London 5 Appold Street Melton Street 1 Churchill Place Commercial Centre London Euston Square London 60 Queen Victoria St EC2A 2HA London E14 5HP London NW1 2EP EC4N 4TR
48 Defending Dignity. Fighting Poverty. Thanks to our donors
Thank you to everyone who has supported CARE in the last year. These include all those people who have been on our challenge events, as well as those regular donors who we rely on to fund our on-going work. Your donations are invaluable in helping us to fight poverty around the world.
The list of larger value donors are provided here: ABC Bank IAB Anadarko Algeria Company IHG Intercontinental Hotels Group Anglo American Jersey Overseas Aid Commission The Anna Rosa Forster Charitable Trust Kaplan Inc Ashurst LLP Kraft Foods Inc. The Austin and Hope Pilkington Trust The Lord Deedes of Aldington Charitable Trust AXA Mr Howard Mayson Barclays Menswear Buyer BCH Digital Ltd Ministry of Foreign Affairs, the Netherlands BG Group plc New Civil Engineer Big Lottery Fund New Media Age British Embassy, Republic of Yemen Mr Andy Oakes Mr Patrick Boyle Olive Communications Mr Bill Bryson Open Gate Trust The Bryan Guinness Charitable Trust The Paul Farrer Charitable Trust Challenge event volunteers The Pontis Employee Benefit Trust Cherie Blair Foundation for Women Prima Solutions Ltd City A.M. The Positive Action for Children Fund Mrs Angela Cluff Proctor & Gamble International SA The Co-operative Professional Clothing director-e Costain Group Retail Week Mr Simon & Mrs Caroline Davis Cdr Desmond P D Scott Mr Geoffrey Dennis Mr Jonathan Seckington Department for International Development (DFID) Mr Malik and Mrs Anar Sharif Diageo Ms Franses Slattery Disasters Emergency Committee (DEC) Société Générale Drapers The Souter Charitable Trust Durham University Charities Kommittee Square Up Media Ecotricity The States of Guernsey Overseas Aid Commission Elton John AIDS Foundation The Strathspey Charitable Trust Emirates SuperGroup plc Estee Lauder Supersonic Travel European Commission (EC) Dr Simon Turton European Community Humanitarian Office (ECHO) Timberland LLC Dr Alison Fielding The Vitol Foundation Gaming Awards by Clever Duck Media Women In Technology GlaxoSmithKline Womenswear Buyer Ground Engineering ZOCA Active Ltd Hugo Boss
Annual Report and Accounts for the year ended 30 June 2012 49 Thanks to our ambassadors
We would like to thank our Ambassadors for their work on our behalf:
David Arnold Stacey Dooley Kate Garraway Laurence and Jackie Llewelyn-Bowen Deborah Meaden Alastair Stewart OBE
50 Defending Dignity. Fighting Poverty. 79 72 73 78 80 83 75-76 84 74 70 82 51 8 23 16 53 40 81 4 32 36 3
1 41 66 77
30 47 44 20 28 26 43 65 5 33 17 39 27 46 13 60 50 58 67 25 45 11 21 6 22 15 24 54 62 12 57 35 55 63 31 19 29 Countries with CARE 18 52 10 48 59 61 programming in FY11: 49 9 2 1. Afghanistan 35. Liberia 38 68 42 64 2. Angola 36. Macedonia 7 ¥ 69 3. Armenia 37. Madagascar 37 ¥ 4. Azerbaijan 38. Malawi 71 5. Bangladesh 39. Mali 34 6. Benin 40. Montenegro 56 7. Bolivia 41. Morocco 8. Bosnia and Herzegovina 42. Mozambique 14 9. Brazil 43. Myanmar 10. Burundi 44. Nepal 11. Cambodia 45. Nicaragua 12. Cameroon 46. Niger 13. Chad 47. Pakistan 14. Chile ¥ 48. Papua New Guinea 15. Côte d’Ivoire 49. Peru** 16. Croatia 50. Philippines 17. Cuba 51. Romania 18. Democratic Republic 52. Rwanda of Congo 53. Serbia 19. Ecuador 54. Sierra Leone 20. Egypt 55. Somalia World of CARE 21. El Salvador 56. South Africa CARE International 22. Ethiopia 57. Sri Lanka Members: 23. Georgia 58. Sudan 70. Austria 24. Ghana 59. Tanzania 71. Australia CARE International • CARE International Member 25. Guatemala 60. Thailand*** Affiliate Members: 72. Canada • Countries with CARE programming in FY11 26. Haiti 61. Timor Leste 73. Denmark -- India* ¥ Limited presence. • Countries where CARE has limited presence 27. Honduras 62. Togo 74. France * • 28. India* 63. Uganda 75-76. Germany-Luxembourg CARE International Secretariat: with ongoing programs. 29. Indonesia 64. Vanuatu 77. Japan 82. Geneva, Switzerland ** • Countries where CARE works through a 30. Jordan 65. Vietnam 78. Netherlands 83. Brussels, Belgium CARE International. strategic partnership 31. Kenya 66. West Bank & Gaza 79. Norway -- New York, United States *** C ARE Thailand is both a Member of CARE International and • CARE International Secretariat 32. Kosovo 67. Yemen -- Thailand*** a country with ongoing programs. (Geneva, Brussels, New York) § 33. Laos 68. Zambia 80. United Kingdom Sub-offices: CARE works through a strategic partnership. ◊ 34. Lesotho 69. Zimbabwe 81. United States 84. Czech Republic (of CARE Austria) CARE International’s Vision CARE International seeks a world of hope, tolerance and social justice, where poverty has been overcome and people live in dignity and security. We will be a global force and partner of choice within a worldwide movement dedicated to ending poverty. We will be known everywhere for our unshakeable commitment to the dignity of people.
CARE International UK’s Mission
We are a driving force within the worldwide CARE network, recognised in the global organisation for:
• making resources available for overseas activities
• influencing the policies and practices of government, business and other organisations
• inspiring and engaging the public
• continuously improving the impact of our work.
Registered office CARE International UK 89 Albert Embankment London SE1 7TP Tel: 020 7091 6000 Fax: 020 7582 0728
www.careinternational.org.uk www.lendwithcare.org
Registered charity number: 292506.
CARE International UK depends on donations and support for our poverty fighting work. Please support us by visiting www.careinternational.org.uk/donate
Private company limited by guarantee number (England and Wales): 1911651. Cover image: © CARE/Josh Estey