CORDAID NAAM BU

CORDAID ANNUAL REPORT 2013 FOCUS ON FRAGILITY CORDAID 2013 ANNUAL REPORT

CONTENTS

message from the ceo ...... 3 cordaid at a glance...... 5

Our mission...... 5 Our vision...... 5 About Cordaid...... 5 How we work ...... 6 following our strategy for greatest impact...... 8 Fund-raising in today’s environment...... 9

Programs in 2013...... 11

Communicating for development ...... 11 Looking ahead to 2014 ...... 13 Our focus for 2014 ...... 13 cordaid at work – building flourishing communities ...... 14

Security & Justice...... 15 Women’s Leadership...... 16 Healthcare...... 17 Extractives...... 18 Child & Education...... 18 Disaster Reduction and Resilience...... 19 Food Security ...... 20 Urban Matters...... 20 Entrepreneurship...... 21 Investments...... 22 Poverty in the Netherlands...... 22 Our partner network...... 22 Community-based approach to beneficiaries...... 23 Our people...... 24 fundraising and funding ...... 26 Our funding in 2013 ...... 26 What we spent in 2013...... 28 risk management...... 29 Financial risk...... 29 Competence/cultural risk ...... 30 how cordaid is governed...... 31 cordaid's 2013 financial statements...... 34

2 APRIL 2014 © CORDAID message from the ceo CORDAID 2013 ANNUAL REPORT

MESSAGE FROM THE CEO

International development cooperation is going through its our work and impacts can be monitored. The ultimate goal, greatest transition ever. Perceptions among all constituents however, is also to inspire all those who share our goals to – beneficiaries, donors, partners - of how it should work are innovate with us. changing. This is happening through shifts in the world’s balance of power, the rise of emerging economies, growing That same desire for openness has also led us to rethink how emancipation in many countries formally designated as we make our annual report. Cordaid has decided to adopt an ‘developing’, the high-tech revolution in the past 10 to 15 years, approach to reporting based on materiality. This kind of and many other factors. There are clear shifts in how develop- reporting is a concise communication based on what is ment cooperation is funded; there is a growing recognition ‘material’ for a good understanding of what and how Cordaid that all constituents, especially beneficiaries, must be involved is doing. We asked our constituents what they want and in consultation on how funds are spent. We call that the need to know. Their views guided our selection of material community-based approach to cooperation. The traditional role components: continuity, expertise, how we execute projects, of the Non-government organizations (NGOs) is also being what impact we have, how we manage risk, and how we are questioned. It is an exciting time for me to join Cordaid, taking governed and held accountable. As always, we are extremely over the CEO role from René Grotenhuis who for just over 10 grateful for the continued commitment of our donors, both exemplary years steered our organization through these institutional and individual, and partners, in this and in all changes. We are grateful for all his efforts and insights and the the other ways they support our efforts. present Board of Directors, myself and COO Henri van Eeghen, will continue to build on his legacy into the future. This 2013 annual report aims to make clear how we aim to guarantee our continuity. We are not there yet. We will build Everything Cordaid does is focused on its mission of building on this approach in the years to come, also by further adjusting flourishing communities in fragile and (post-) conflict regions. our reporting and other internal systems to generate the These are amongst the most difficult regions to work in. Often, information that will help constituencies better understand and by definition, the risks are high and the number of what we are doing. In the future, we will attempt to incorpo- organizations willing to take them is low. Yet, this deliberate rate the latest Global Reporting Initiative guidelines into the choice is almost inevitable for an NGO with Cordaid’s back- annual report. This will keep us at the forefront of our sector ground; our Catholic identity has always driven us and our and distinguish Cordaid in a rapidly changing world. Caritas partners to work with the poorest in the most difficult places.

As an integral part of the social fabric in the Netherlands, Cordaid aims to anticipate and critically embrace change – it is something we have been doing for almost a century. So we continuously look critically at the way we work. If necessary, we then adjust our own organization and strategy so that we can continue to pursue our mission into the future. That is why in 2013 we began the transformation of our organization into a social enterprise, concentrating our Simone Filippini community-based expertise and innovating new ways of Chief Executive Officer working and funding. We believe this transformation requires greater openness to our constituents and the wider world.

This new working reality is still in transition. But it has already presented us with a real opportunity to claim this new development cooperation environment as a leading player with evidence-based propositions. Cordaid is one of the most open NGOs in the world. During 2013, we built on that position. One example is our Open Data program based on the International Aid Transparency Initiative (IATI). While over 200 organiza- tions and governments worldwide publish their development cooperation data according to IATI standards, we took this initiative a step further. Cordaid now shares all our program and project data, including budgets, targets and results so that

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4 APRIL 2014 © CORDAID Cordaid at a glance CORDAID 2013 ANNUAL REPORT

CORDAID AT A GLANCE

Our vision (NGO) in the Netherlands. It was established in 2000 when a Our vision is a world where we share our Global Common number of Dutch relief organizations joined forces. Some of Goods, where we make space for diversity and where we create these, such as Cordaid Mensen in Nood (literally: people in flourishing communities that can reach out to and work with need), had been set up initially in response to the stream of the vulnerable around the world. In flourishing communities European refugees into the Netherlands during the First World people share values, interests and a common purpose. War which is why we are marking our first centenary in 2014. Flourishing communities create space where people can live During a century of working on the world’s worst catastrophes with dignity, safely, have the freedom to speak out and have and calamities, ranging from helping the victims of dictator- access to quality and affordable basic services, such as health- ships and (civil) wars to famine relief and support following care. A flourishing community offers its people access to natural disasters, that early commitment to protecting and opportunities so that they can realize their potential and offering aid to vulnerable people has remained the same. And it participate in social, economic, cultural and spiritual life. continues to be driven by a Catholic identity and its associated values; new employees at Cordaid still learn about those values Our mission – dignity, solidarity and stewardship - as part of their intro- To bring about transformation in societies around the world ductory program. so that they become more just, more inclusive and more st sustainable. That is why Cordaid aims to bethe NGO working Our mission is just as relevant in the 21 century. Cordaid inter­nationally and consistently with constituents on locally- today still provides help and support wherever poverty, based development and cooperation to build flourishing exclusion, injustice and violence strike. More than 1.2 billion communities in fragile contexts and (post-) conflict areas. people live in extreme poverty and social inequality. Our past We do that through our social enterprise approach and experience helps us to focus on those areas of international financial innovation. development that are most urgent and difficult: fragile contexts and conflict areas. About Cordaid We work closely with a network of 617 partner organizations in Cordaid (Catholic Organization for Relief and Development 38 countries in Africa, Asia, the Middle East and Latin America Aid) is one of the largest non-governmental organizations as well as providing help to disadvantaged groups in the

CORDAID IN 2013

Emergency help: 11 7 ▪▪ Philippines - typhoon Haiyan Countries outside the Netherlands with countries adopted Results Based Finance ▪▪ Syria - emergency help conflict victims Cordaid offices as national healthcare policy Cordaid teams in CAR and South Sudan 181 MLN EUR temporarily evacuated due to violent 10 Total funds raised conflict years of Community Managed Disaster Risk Reduction 28 .3 MLN EUR 233 Total individual contributions Number of staff in The Hague 6 .5 MLN EUR Spent on fundraising 147 .9 MLN EUR 238 Total amount spent directly on programs Number of staff in country offices 3 .9 MLN EUR Management & Administration expenses 617 >1,600 Number of partners Number of projects funded Achieved best-in-class on opening up 38 project data Number of countries

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Netherlands itself. We are proud co-founders of Caritas communities we take for granted. Thatact ion has immeasura- Internationalis, which brings an additional worldwide network ble impact as, like Cordaid, people around the world strive to of over 160 organizations; we are able to organize responses to build flourishing and peaceful communities. disasters even more rapidly in countries where Caritas in We call that: Care. Act. Share. Like Cordaid. represented. Our local presence in a particular country often results from the fact that our Caritas partners are usually How we work found in fragile and (post-) conflict areas. As one of the Netherlands’ largest NGOs, Cordaid raises and receives funds from both governmental and other institutional Fragility demands a comprehensive approach. Building donors, companies and private and family contributors to flourishing communities requires more than only healthcare finance its international development and cooperation or security and justice. It demands combined action and activities. We are focused on what are arguably the most programs in different disciplines to deliver empowerment, difficult and risky fields: fragile contexts and (post-) conflict security, opportunity, entrepreneurship and governance so areas. This requires very specialist and combined expertise. that people can rebuild trust, resilience and self-reliance. That is why we are organized by dedicated Business Units (BUs): Healthcare, Child & education, Food security, Security & justice, That is why our professional staff also works in Cordaid offices Women’s leadership, Disaster response and resilience, Urban in 11 countries and we are represented in many others, either matters, Extractives, Investments, Entrepreneurship and executing programs or supporting partners on projects. We Poverty in the Netherlands. We also have offices and staff in have a long track record in Healthcare, especially in sexual and 11 of the most fragile states and regions in the world. reproductive health, and in Disaster Response. We are active in the more responsible and sustainable use of natural resources At any given time, all our BUs are working to innovate and and in stimulating (investment in) rural and (post-) conflict set up new programs while managing, coordinating and entrepreneurship through dedicated investment funds. monitoring multiple projects in multiple countries. In addition, As an organization, Cordaid began because people cared about our BUs often work together for greater impact. BUs work closely alleviating the suffering of people in war-torn Europe. For with tendering specialists to identify potential funding for the almost a century, we have shared our own prosperity and programs and projects we innovate and initiate. We are part of a knowledge with those who still have to fight for the kind of network of carefully selected partners around the world.

WHERE WE WORK

Cordaid presence netherlands Cordaid offices

syria afghanistan lebanon

vietnam honduras chad sudan haiti guatemala central african republic south sudan nigeria bangladesh nicaragua ethiopia philippines sierra leone el salvador kenya ghana india colombia uganda cameroon rwanda sri lanka congo-brazzaville burundi tanzania indonesia bolivia dr of congo peru zambia malawi zimbabwe

south-africa

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OUR ORGANIZATION

▪▪ >1,600 community- ▪▪ Our funding comes from government and based projects in 38 institutional donors of the most fragile ▪▪ In the Netherlands, 324,000 individuals support our countries in the world work through Cordaid Mensen in Nood, Cordaid Memisa, Cordaid Mikrokrediet, Cordaid Kinderstem and Cordaid Bond zonder Naam ▪▪ We work with many companies on innovative solutions > 1,600 donors local projects

▪▪ We have partners with ▪▪ We raise funds, develop, implement and monitor general and specialist 617 expertise development cooperation programs and projects in expertise that work with 38 countries us on community-based partners ▪▪ Our specific expertise is in fragile contexts and projects (post-) conflict areas where our specialized business ▪▪ As a founder member of units implement - often integrated - projects for Cariitas Internationaliis, healthcare, security & justice, women's leadership, we have exceptional extractives, food security, child & education, disaster support from this risk reduction & disaster response, entrepreneurship, network especially in urban matters and investments. fragile areas ▪▪ We bring an integrated approach to tackling the issues of communities in these regions by asking them what they need ▪▪ We have offices in 12 countries including our headquarters in the Netherlands

A key part of our work is raising awareness and communicat- Cordaid aims to be recognized as one of the most transparent ing about the challenges millions of people are facing in fragile NGOs in terms of openness on program and project outcomes contexts and conflict areas. Cordaid is part of (inter)national and impacts. From 2013, we publish comprehensive data Catholic grass-roots networks, is a founder member of Caritas according to International Aid Transparency Initiative (IATI) Internationalis and a member of CIDSE, and has five dedicated standards on all projects through our website, www.cordaid. labels in the Netherlands: Cordaid Mensen in Nood (literally: org/opendata. All the stories behind our projects including people in need), Cordaid Microkrediet, Cordaid Bond zonder goals, results, funders and partners are frequently updated Naam, Cordaid Memisa (Healthcare) and Cordaid Kinderstem and are available at www.cordaid.org/projects (Child’s Voice). We target our campaigning through these and other channels using conventional and social media. Campaign activities include partnerships with leading media, especially television and special-interest group websites.

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FOLLOWING OUR STRATEGY FOR GREATEST IMPACT

In the 21st century, it is safe to say that at no time in the past areas. Where societies are falling apart, we are building has international development cooperation been in such a flourishing communities by offering empowerment, security state of transition. We welcome these changes. They bring and opportunity and governance. We have knowledge and many opportunities in our changing world of globalisation, experience in the most fragile areas on earth. We have access to technological possibilities and deepening awareness local and national infrastructure there. We work with a strong amongst (Dutch) world citizens. And they provide unlimited international network. And we have the support of 324,000 creative sources for fundraising and connecting people and Dutch private and family donors. Cordaid has now refocused organisations that share our goals and attitude. We call the organization based on three integrated drivers to increase that: Care. Act. Share. Like Cordaid. So, from 2013, we began impact: Programs, Fund-raising and Communication that will the strategic transformation of our organization to a social help us increase awareness of and lobby on the challenges and enterprise. issues. This strategic transformation involved putting in place a Business Unit (BU) structure supported by staff functions, Anticipating change in a fast-changing world such as strategy, finance & control and communication. Our goal is to be future-proof, tackling our mission as One Cordaid. So we are positioning Cordaid as a social enterprise Strategic goals in 2013 that creates possibilities and opportunities for all who want to At the beginning of 2013, we set a number of targets with clear contribute to development and cooperation. It requires us to Key Performance Indicators (KPIs) to support our transition drive transparent and effective international cooperation, to to a social enterprise. These include: claim renewal in that cooperation and to show leadership. ▪▪ identifying and pursuing alternative sources of both We already pursue all of these challenges and we do it in the institutional and private donor funding to support self- toughest regions of the world – fragile contexts and conflict sufficiency in BUs;

CORDAID’S STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS

Strengths Opportunities ▪▪ Global network ▪▪ Global issues (food, energy, climate, natural resources) ▪▪ Strong links with local and international donors/partners lead to poverty-related conflicts. NGOs can act as ▪▪ Strong track record in fragility/conflict transformation, catalysts for global cooperation Healthcare, Disaster Risk Reduction, Emergency Aid, ▪▪ Multilateral agencies (UN, World Bank and others) Results based financing, Security & Justice and recognizing value of NGOs and seeking cooperation Investments ▪▪ A new agenda for the post-2015 development goals ▪▪ Growing number of more than 324,000 grass-roots ▪▪ Need for specialized comprehensive approach on fragility financial supporters ▪▪ Corporate-responsibility based private and company ▪▪ Strengthening of the network of Caritas International and initiatives creating opportunities for cooperation and benefiting from Pope Francis' commitment to fighting synergy poverty and exclusion ▪▪ Technological possibilities ▪▪ International highly specialized new staff members ▪▪ Growing recognition of our role as an implementation ▪▪ Substantial own leverage funds partner ▪▪ Leadership role in open data reporting ▪▪ Broad portfolio of labels and propositions for the private and the B2B market

Weaknesses Threats ▪▪ Diminishing traditional fund-raising sources and new ▪▪ Impairment general perceptions of NGO/charitable methods not yet fully implemented public image ▪▪ Relatively new management ▪▪ Reduced income from government/private donors ▪▪ Social entrepreneurship comparatively new approach in ▪▪ More competition on tenders development cooperation ▪▪ Diversity of Cordaid labels in the private donor market

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▪▪ putting in place a more transparent reporting structure, Fund-raising in today’s environment – significant including open data on programs and projects to improve increases in funding public access to our outcomes and impacts; For decades, governments, and especially the Dutch govern- ▪▪ Raising visibility of Cordaid labels and proposition ment, co-financed those Non-Governmental Organizations awareness for all the labels and the newly established (NGOs) that were able to raise funds from their own grass- Business Units by connecting through media coverage, roots supporters. From 2016, that governmental funding a revitalized website and social media; process will change. At the same time, the way private and ▪▪ establishing fit-for-purpose processes in Business Units, family donors give is changing even more quickly. This means including professionalization of tendering/bids; we will have to be even more agile, flexible and innovative in ▪▪ expanding our capacity on the ground to both increase our bringing in the funding to secure the continuity and finance ability to implement and execute programs and to access of our programs. During 2013, we focused on finding innova- local funding sources; tive ways of securing finance. That is why we are coming up ▪▪ support staff transition to a social enterprise culture. with new propositions to bring in funding. We were able to achieve significant increases in funding from institutional This section of our annual report shows what we have been donors primarily through a 35% success rate on tendering. In doing to achieve these goals. 2013, funds raised from the World Bank and the Global Fund & United Nations tripled and financing from the European What we have done Union doubled. Our target for 2014 is a 40% success rate. From 2013, our programs and projects are initiated by one of Moreover, by creating innovative ways to enable corporates to our 11 Business Units (BUs): Healthcare, Child & education, participate on our mission, we have increased our cooperation Food security, Security & justice, Women’s leadership, Disaster with business. For example and in cooperation with our response, Urban matters, Extractives, Investments, Entrepre­ DRR-Disaster response & resilience business unit, the interna- neurship and Poverty in the Netherlands. Each BU is respon­ tional weather forecasting group, Meteo Consult, has made sible for raising the funds its needs, developing community- available tools to help partners in the Philippines be better based propositions, services and/or products and ‘marketing’ prepared for future disasters. The goal is to move this partner- these to potential donors and beneficiaries. The idea behind ship to one of shared value in which all participants benefit. this way of working is that we gather together all our specific Our Healthcare business unit has constructed a Public-Private knowledge of these focus areas. This specific knowledge Partnership (PPP) that includes Delft Imaging Systems to includes expertise in raising funds from (institutional) donors. radically reduce maternal mortality. The PPP will be piloting It further enables us to offer our accumulated expertise to low-cost, portable ultrasound technology in Ghana in 2014. partners in a more topic-related way. It allows us, more fre- This is a win-win venture as the piloting enables the local quently and where appropriate and desirable, to better deploy clinics and midwives to test the technology, potentially our (human) resources to actual execution in fragile contexts leading to sales. ASN Bank in the Netherlands offers 500,000 and (post-)conflict states; during 2013, our staff in Cordaid clients the opportunity to raise school-related funding international offices grew to 238 (2012: 179) located in 11 coun- through their social investment savings accounts. More than tries. And it supports our communication and awareness role. half a million euros is raised this way every year. All of these initiatives are part of our aim of reaching out to and facilitat- Tackling challenges ing participation of partners who share our vision of develop- As with all change programs, in this first year, 2013, we have ment cooperation. had to tackle some challenges. But we are satisfied with the results achieved to date. We went through this transformation at a time when not only is the end in sight of traditional government co-funding but also when giving patterns among Dealing with disasters private donors are changing. We believe that the creation of a Responding to major (natural) disasters is hard-wired into social enterprise also means more openness in reporting back Cordaid’s DNA. In 2013, the Philippines’ typhoon Haiyan to constituents. So internal (reporting) systems have been dominated relief efforts in the final part of the year. adjusted to accommodate new ways of working and our Through Cordaid Mensen in Nood, we immediately opened a commitment to transparency. Internally, a cultural shift bank account for victims. It soon became clear that the scale means personnel have to make a transition from old to new of the disaster required a national appeal through the Dutch ways of working - always a tough task. Training programs Cooperating Aid Organizations (SHO), of which Cordaid is a have been put in place to help make the change (see section on member and holds the current chairmanship for the Our People). The Quality Manual and working processes had to campaign. In addition to transferring the funds already be adapted as well to the new way of working. Internal raised from SHO, Cordaid also took on the role of managing cohesion, also to prevent duplication of effort, was strength- communication for the appeal. Ultimately, SHO raised more ened through increased internal communication efforts. than €36 million for the victims of Typhoon Haiyan. How Progress was measured constantly through employee surveys these funds have been spent can be found (in Dutch) on managed by our Human Resources team. (For an overview of www.samenwerkendehulporganisaties.nl/actions/filipij- the risks involved in our transition to a social enterprise, nen-2013. For information (in Dutch) on practical actions, please see the section on Risk management.) such as provision of basic sanitation, clean water and other necessities, visit www.cordaidmenseninnood.nl/filipijnen.

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Changing donor behavior – growing number of donors Smart initiatives There are clear indications that the ‘giving’ patterns of private From 2013, Cordaid Memisa began directly targeting mothers/ and family donors are changing. The generation that commit- parents-to-be and young families rather than general popula- ted monthly contributions for the long term is gradually fading tions of potential donors. For example, the Cordaid Memisa out. Attracting regular contributions from younger genera- team has sought a number of partnerships with special-inter- tions is tougher. The ongoing economic situation is playing a est organizations. These range from dedicated websites for new role as potential donors generally have less to spend. People are parents to retailers who offer to donate a percentage of sales to less willing to commit to long-term contributions. However, Cordaid Memisa at no additional cost to the shopper. This is an disaster appeals, such as the Philippines in 2013, show the excellent example of a win-win situation whereby ‘shoppers’ Dutch are as generous as ever. Basically, people want the facilitate our work through their choice of store and retailers freedom to decide in their own time if and what they want to increase their sales. In 2013, we began partnering with Wij donate, and they want to see what happens to their contribu- Special Media so that we now reach 90% of mothers-to-be in tions. They want to help others help themselves rather than the Netherlands to promote this new way of contributing to committing to pure philanthropy. It is imperative that Cordaid the health and well-being of other mothers around the world. secures its grass-roots support by innovating new ways of It launched on 1 January 2014 and initial results are encourag- attracting private funds. We have already made a start in 2013. ing, especially as full figures for 2013 show traditional dona- Our private and family donor base grew from 316,000 at tions were down last year although the decline was offset by an year-end 2012 to 324,000 in 2013 although total donations were increase in legacies received. We will be able to report more down by around two million euros (2013: €28,330,000; 2012: next year. In terms of our communication role, we participated €30,388,000). That is why we are further innovating our private in a series of documentaries around childbirth, focusing both fundraising. on the Dutch experience and the plight of new mothers in Cameroon. Cordaid Memisa will be the beneficiary of a drive to Attracting funds find the ‘Baby of the Year’ with Sky Radio to be aired in May Cordaid has five well-known labels in the Netherlands, 2014. A similar campaign, this time with the Dutch classical representing 324,000 regular private donors: Cordaid Mensen radio station, has been started for Cordaid Kinderstem, in Nood (people in need), Cordaid Microkrediet, Cordaid Bond focusing on grandparents to find the ‘Grandchild of the Year’. zonder Naam (poverty in the Netherlands), Cordaid Memisa Cordaid Memisa also began using Facebook as a marketing and and Cordaid Kinderstem (Child’s Voice). This level of grass-roots loyalty channel in 2013 while Cordaid Kinderstem will launch trust and loyalty is both a reason for being for Cordaid and an on Twitter in 2014. essential component in funding our programs. These labels inform the Cordaid mission and our proposition. For example, Cordaid Mensen in Nood is a key contributor to disaster relief in emergencies and, perhaps even more vitally, helps reduce the “ This is progress in Afghanistan…” impacts of future disasters. Funds raised through Cordaid Kinderstem go directly to fund our Child & education pro- Every two hours, an Afghan woman dies due to grams. With traditional giving patterns diminishing, we are pregnancy-related complications. Although it may finding alternative methods of engaging contributors. Cordaid seem hard to believe, this is progress. Today, 327 Memisa is a good example of how we are innovating. This fund mothers out of 100,000 die before, during or after aims to raise money to help reduce maternal mortality, one of childbirth. Ten years ago the number was 1,600. Over the eight Millennium Development Goals. Currently, it is the years the number of health facilities has increased. estimated that 292,000 mothers die in childbirth every year We had very few midwives in the past but now there (World Health Organization) or one woman every two minutes; are more than 3,000. In 2003, only 9% of the pregnant 99% of those deaths occur in developing countries. women gave birth with the help of skilled birth attendants. Today it’s 39%. We still face challenges. Women’s unmet needs are so numerous and urgent, they need our long-term support. We need more midwives, more nurses, more female doctors, more clinics. And our health professionals deserve more trust. We still have a long way to go.’

Dr Shamsul Islam Cordaid Afghanistan

Follow Dr Shamsul Islam’s regular blogs at www.cordaid.org/ blogs

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Open data access – Share . Like Cordaid . its old role as partially subsidized ‘donor’ to the new realities Fighting poverty starts with sharing. That is why we share all of international development cooperation, we face a number a our project data. Our constituents can now monitor all our challenges. Our BUs must make the organizational adjustment programs and projects through the Cordaid website. We have to a more entrepreneurial mindset. We had to establish invested many man hours in new processes and systems that processes whereby individual BUs can cooperate most show our donors exactly where their contributions go, what effectively with others, driving the One Cordaid concept, progress has been made on the programs they are supporting including prevention of duplication and overlap in efforts. and what the outcomes and impacts are. The International Aid Communication between BUs and staff departments had to Transparency Initiative (IATI) was launched in 2011. It offers a be improved so we increased internal communication efforts. standard way of reporting program and project data that is We are now organizing a policy week twice a year for all universally recognized. We saw the benefits of adopting the international managers, providing leadership courses on social IATI standards from the start but have taken this initiative a entrepreneurship and initiating bi-weekly meetings for all BU step further. While over 200 organizations and governments managers. We also had to become more innovative in identify- worldwide publish their development aid data according to ing sources of funding. Our tendering processes became more IATI standards, Cordaid is the first to do so comprehensively, targeted and professionalized. By the end of this first transi- demonstrating our commitment to leadership in renewing tional year and with the support of the Tendering team, development cooperation. We include budgets, targets and Cordaid had submitted 68 bids for program and project fund- results so that everyone can monitor and evaluate the impacts ing. Of these, 24 were successful (35%) with significant potential we aim to achieve. We will continue roll-out and implementa- outcomes and impacts – please see www.cordaid.org/projects tion in 2014, including a dashboard that will enable all for set targets and progress to date. constituents to manipulate data for greater accessibility and transparency. (visit: www.cordaid.org/opendata). Expert cooperation Increasingly, BUs are cooperating to bring integrated proposi- tions to community-based requirements so that their com- bined expertise can reinforce outcomes and impacts. We have ‘ We are impressed by the completeness and detail more than one BU working together in many countries, either as partner monitors and managers or actually executing in how Cordaid reports results. This demonstrates ourselves. Integrated action often generates the best impacts, courage and commitment to the transparency so increasingly BUs are pooling their knowhow and expertise agenda of development aid. It inspires and is a to create project proposals. Please see Cordaid at work for more on BU activities and impacts. source for replication.’ Theo van de Sande Communication – indispensable for development Open Data & Transparency, Ministry of Foreign Affairs cooperation Attitudes to development cooperation and aid have been changing for some time. In addition to demands for more accountability, both ordinary citizens and (institutional/ Improving reporting systems governmental) donors want to see the (positive) impacts of We not only put all our data online, we also make it easy to their contributions, which projects have been funded and how assess by putting up on our website the stories behind the the work is implemented on the ground. This is one reason why projects, goals, results, funding-partners, pictures and regular communication is indispensable to ensuring the continuity of updates (visit www.cordaid.org/projects). So information is our work. We have already achieved best-in-class on opening available to all interested parties. This commitment required a up our program and project data. But there is more. As in every huge effort from the whole organization. During 2013, our IT other key component in our strategy, we must be even more team reconfigured the technical infrastructure essential to flexible, agile and innovative in how we raise awareness of and providing this open data. All our projects were uploaded to the need for action to build flourishing communities. That is why database that is linked directly to web pages. Now the database we update our website on a daily basis with news on our work is established (see www.cordaid.org/opendata), program and and our opinions. The corporate strategy unit and corporate project managers from each BU and our people around the communications have initiated a project on the ‘content value world can easily input their data in a timely and transparent chain’ that aims to produce high-quality content on our way. This new system is an integral part of our reporting activities and projects – it should be rolled-out in 2014. infrastructure that was also renewed in 2013 and is now being Institutional donors especially appreciate our publications rolled-out to our international offices so that the whole and research. organization reports in the same way. Positioning Cordaid Programs in 2013 The aim of Cordaid’s communication strategy is to reach out to Cordaid works closely with donors and partners to meet the all those who share our goals and to raise awareness on how needs identified by local communities. In 2013, the BUs were they can participate. We do that by continually driving home involved in more than 1,600 projects in 38 countries (for some our key messages: of the most important outcomes and impacts, please see our Our communication should help all constituents connect with section on Cordaid at work). As Cordaid makes the change from what we do and find ways to become involved in our mission.

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So we focus on capturing their attention, stimulating their Coordinating relief efforts involvement and gaining their trust. And we do it by imparting In 2013, we put our communication expertise to work for the sense of urgency we feel. At Cordaid, we are convinced that disaster response following Typhoon Haiyan in the Philippines. ‘building communities’ also refers to the partnerships and Cordaid is a member of and is currently campaign chair connections we make with all constituents. Donors and organization 2013/2014 for the Cooperating Aid Organizations partners in the countries where we work and our ultimate (SHO) that works to coordinate Dutch fund-raising on major clients – the people and communities whose aspirations appeals or natural disasters. During the final months of 2013, we support – will only connect with our mission if they our communication and other teams coordinated the efforts understand its potential. So we needed to increase our name of the nine members of SHO, hundreds of volunteers and all recognition and further establish Cordaid as the NGO when it Holland’s broadcasters. All worked around the clock on keeping comes to fragile states and conflict areas while reinforcing our the Dutch population up to date on events following Typhoon mission of building flourishing communities. This is where Haiyan. Ultimately, SHO raised €36 million for victims of the communication is crucial. disaster.

Giving a voice to the disenfranchised CORDAID'S IDENTITY If our website provides all information for all constituents, our lobbying activity is more focused on individual topics and areas

What of concern. As a large NGO, Cordaid often has access to seats at ▪ Building flourishing communities through many tables so we are in a position to give a voice to those empowerment, security and opportunity whose voices are rarely heard. As recognized experts in the field How ▪ S ustainable connection through social entrepreneurship of development cooperation and especially in fragile states and Why ▪ M oved by inequality and exclusion conflict areas, we can form a powerful lobby. All our BUs are ▪ S olidarity heavily involved in topic-related lobby groups. Throughout 2013, ▪ Compassion we worked on position papers, had meetings with politicians and civil servants, joined advisory commissions and used PR to raise awareness in the political arena. An example of how our knowledge and experience can drive change is our vigorous

Circle by Simon Sinek lobbying on the South Sudan Oil Revenues Act. Working with partners, a position paper was written that informed members of parliament on the great damage and suffering caused to Reaching constituents local communities through oil extraction. As a consequence, Cordaid communicates using the full range of conventional parliament decided on an amendment that would give those and new media. We capture attention by continuously publish- communities 3% of oil revenues – an amount equivalent to ing topical news on our website and through mass media. We $200 million per year – to counteract negative impacts. stimulate involvement by connecting through social media and live events. We gain trust by publishing the proof of our impactful ways of working in high-quality research and knowledge-based position papers and fact-files (over 40 in 2013 “ Lobbying for women’s rights…” alone) while at the same time being completely open about our projects and data. We use campaigns to raise specific aware- 13 March 2014: Civil organizations like Cordaid- ness also through the websites of our dedicated labels in the partner, the Afghan Women's Network, played an Netherlands. In 2013, we posted 262 individual new items and important role in initially postponing the signing were able to increase unique visits to the site from 400 per day of a law which severely limits the rights of women. at year-end 2012 to 1,200 per day by the end of the reporting Article 26 of Afghanistan’s draft Criminal Procedure year. In total, 174,000 unique visitors viewed our Dutch- Code effectively denies women protection from language site and over 66,000 visited the English-language domestic violence and forced or child marriage, and site. Our visitors came from all over the world, although the gives immunity to many perpetrators given its ban on majority were Dutch (63%). Of our Business Units (BUs), relatives testifying against one another. Unfortunately, Healthcare was visited by the most people (>5,000). Urban the law was signed in early 2014. So we will keep Matters and Women’s Leadership were also very popular. Our supporting local women’s voices to help stop the projects had over 30,000 visitors in both languages. And more further implementation of such discriminatory than 4,300 downloads were made of information posted on our laws in Afghanistan… site. All the social media we use achieved an average 50% increase in followers. Daily issue management aimed at Zohra Akseer earning free publicity resulted in a 25% increase in media Cordaid’s Women’s Leadership coordinator, Afghanistan coverage in 2013 compared to 2012. Follow Zohra Akseer’s blogs on Afghanistan at www.cordaid.org/ blogs

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For full details of the briefing note we co-published with Open Looking ahead to 2014 Oil on South Sudan, please visit www.cordaid.org/en/ten-min- The transformation Cordaid is currently undertaking is far utes-for-south-sudan/. In Afghanistan, we have partnered with from complete. We still have a lot to do to ensure our organiza- the Afghan Women’s Network to lobby NATO and the Afghan tion is geared to the rapidly changing international develop- government ahead of the transfer of security responsibilities in ment cooperation landscape. In 2013, we have done much to 2014. From May 2013, we have been generating a three-monthly claim our position as a knowledge-based innovative key player report on the impacts this will have on women. The aim is in the changing world of development and cooperation. to provide real community-sourced information to help We have also done much to support our new organizational the authorities fine-tune their policies (for more, see structure based on social entrepreneurship and have booked www.cordaid.org/en/publications/afghanistan-monitoring- successes; it is an ongoing process. In 2014 and beyond, we will womens-security-transition/). continue working to achieve social change in the most fragile and conflicted regions of the world. This is the underlying driver of our mission to build flourishing communities.

“ Tackling the resource curse” Our focus for 2014 ▪▪ creating evidenced track record that can substantiate our ‘To really tackle the resource curse, local communities expertise and experience to potential donors; need to obtain a meaningful and informed position in ▪▪ Cordaid is considered a leading NGO at least in the following consultation processes, at the negotiation table and in themes: women, openness/transparency, financial monitoring panels. National legislation and regulation innovation, community driven approaches; should support this. Donors should make funding ▪▪ Ongoing expansion of country offices to reinforce our available to train and advise communities and wider presence in fragile contexts and (post-) conflict areas; civil society, and assure that they are better organized ▪▪ Cordaid uses open data as a management tool to improve and connected. Specialized NGOs have the knowledge integrated programming & country strategies resulting in and the network to do this. This is the most sustainable flourishing communities; solution to the resource curse.’ ▪▪ Cordaid has been selected as a strategic partner of the Dutch Ministry of Foreign Affairs; Eelco de Groot ▪▪ has broadened its institutional donor base with at least four Cordaid extractives expert governments (Nordics/other European and non-European); ▪▪ a 40% success rate on tenders (2013: 35%); Eelco de Groot often writes blogs. They can be found on our ▪▪ Raising at least €28 million from private and family donors website at www.cordaid.org/blogs in the Netherlands; ▪▪ Through the centenary activities in 2014, has raised unassisted name recognition by 15% and assisted name recognition by 25% in the Netherlands; New policy – new opportunities ▪▪ All scores on employee satisfaction surveys >7; In 2013, we were closely involved in adjustments to new ▪▪ Financial results of all BUs/staff departments at least at development cooperation initiatives in the Netherlands. Major budgeted levels. political issues concerning international development coopera- tion included the publication of the Dutch Aid and Trade Policy that made official the long-expected budget cuts. Part of the Policy includes the creation of a ‘Dutch Good Growth Fund’ for the period to 2015 and beyond. When the final government plans were published, Cordaid stood out from the crowd of negative responses by pointing out the opportunities of the new policy line. This resulted in positive media attention and strengthened both our position as a leading opinion maker and our working relations with the Ministry of Foreign Affairs. Unlike many of our peers, we see the challenge in diversifying funding and seeking new ways of working with diverse partners as a driver of the renewal we believe is essential in international development cooperation. You can find many documents on fragility (some in Dutch only) on our website: www.cordaid.org.

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CORDAID AT WORK BUILDING FLOURISHING COMMUNITIES

Cordaid is driven by a very clear mission: to help people in international office capacity and capability so that we can fragile contexts and conflict areas build flourishing com- implement more of our own community-based programs, munities. We are convinced that a flourishing community also in cooperation with partners. offers its people a peaceful, dignified life and opens up opportunities for them, enabling them to help themselves Funds available for programs in 2013 improve their lives. Our job is to facilitate that development. In 2013, Cordaid received just over €88.4 million in Dutch Fragile states and conflict areas are amongst the most government funding and raised a further €42.3 million from difficult regions to work in. But this choice was a deliberate other (institutional and corporate) sources. Cordaid has in choice and fully in line with an NGO with our roots and place a clear policy on accepting donations from foundations, background. For almost a century, our reason for being has companies and other organisations. At present, we are working been to provide support in the world’s worst catastrophes to update that policy. This is due to the growing importance of and calamities, ranging from helping the victims of these funding streams and the broadening of the cooperation dictatorships and (civil) wars to famine relief and support scope with the private sector. Partnerships are not always following natural disasters. We still do the same today by about funds. They can also refer to partnering on developing using our ability to raise funds, increase awareness through ideas, as our Urban Matters and DRR BUs did with a number of communication and offering our professional expertise to companies in 2013. Subsequently, funding can be raised by the help people address the underlying issues and challenges. partnership. Our grass-roots private and family donors in the Netherlands gave over €28.3 million through our five labels: Cordaid transitions to social enterprise Cordaid Mensen in Nood whose raised funds go to disaster As one of the Netherlands’ largest NGOs, Cordaid is at the heart relief, Cordaid Microkrediet that supports small entrepreneurs, of a world of constituencies: beneficiaries, (private and family) Cordaid Bond zonder naam that provides help to vulnerable donors and grass-roots networks, partners and our own people in the Netherlands, Cordaid Memisa for maternal personnel, both at our main office in The Hague and at our health and Cordaid Kinderstem for Child & education. international offices in 11 countries. In the 21st century, the Some of our funding can be used for all or any Cordaid world of international development cooperation has undergone program; money raised by our labels in the Netherlands and is still in the process of major change. There are clear shifts is earmarked for specific purposes. in how development cooperation is funded, the traditional role of NGOs is being questioned and more accountability is Building flourishing communities in fragile contexts required from them, there is a growing recognition that all The overriding challenge in fragile and (post-) conflict coun- constituents, especially beneficiaries, must be involved in tries is restoring trust and social cohesion, both at community consultation on how funds are spent. NGOs are increasingly level and between communities and the state. Cordaid sees required to prove the viability of their methods and actions flourishing communities as the DNA that helps to shape the through demonstrable, knowledge-based evidence, track record social fabric of a nation in which caring for and taking care of and hard outcomes and impacts. In our chosen specialist field one another are seen as fundamental values. That is why all our – fragile contexts and conflict areas – the funding situation is activities are community-based and through the individual even more precarious due to its higher risk factors – often and and integrated efforts of our Business Units, are focused on by definition, there are no guarantees. Investing in fragility the components that help build trust and real community. means high risk, low reward. This presented Cordaid with a real opportunity to claim this new market for development We see the keys to building flourishing communities as: cooperation as a leading player with evidence-based proposi- ▪▪ security: protection for people, freedom from fear and the tions. Our response to that opportunity and in anticipation of provision of justice; changes to traditional funding has been to ensure continuity ▪▪ governance: institutions that are responsive to people’s and into the future by transitioning the organization into a social communities’ needs and represent their interests in a global enterprise. We have put in place a Business Unit (BU) structure world; with responsibility for raising their own funds and increasing- ▪▪ empowerment: the possibility for people to speak out and ly using their expertise to develop, implement and manage participate in the decision-making processes that shape projects on the ground. Each BU has clear impact targets and their society; goals. In line with our shift from a ‘donor’ role, we are readjust- ▪▪ opportunity: access to basic services, economic ing our personnel allocation. Increasingly, we are growing our improvement and the right to earn a decent living.

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FLOURISHING COMMUNITIES

SECURITY GOVERNANCE EMPOWERMENT OPPORTUNITY

Conflict resolution Diversity in representation in key Expanded social capital at Access to good-quality social decision-making and political community level services like healthcare and bodies education

Social trust, mutual Transparency and accountability Skills and competencies develop- Access to employment responsibility and caring ment of entrepreneurs and service practitioners

Protection of vulnerable groups Efficient and accountable Technical assistance to community Access to entrepreneurial needs public administration, legal groups and CSOs (finance, inputs, markets) institutions and public services

Confidence in the police and Legitimacy of the state Access to the equitable security and justice systems distribution of resources and infrastructure

…with a special focus on the Democratization and rule of law position and role of women

When developing programs and projects, these components act as drivers of both goals and potential impacts.

BUSINESS UNIT SECURITY GOVERNANCE EMPOWERMENT OPPORTUNITY

Security & Justice ✔ ✔ ✔

Women’s Leadership ✔ ✔ ✔

Healthcare ✔ ✔ ✔

Extractives ✔ ✔ ✔

Child & Education ✔ ✔ ✔

Relief, Risk & Reduction ✔ ✔ ✔

Food Security ✔ ✔ ✔

Urban matters ✔ ✔ ✔

Entrepreneurship ✔ ✔

Investments ✔ ✔ ✔

Security & Justice

What we do: Around 1.5 billion people around the world live Where we work: Afghanistan, Burundi, Congo DRC, Haiti, without security. In many fragile and (post-) conflict regions Palestine and South Sudan. the government cannot offer justice and security to the Funding sources: Dutch Ministry of Foreign Affairs, Dutch population. Due to a lack of political will to invest in the Postcode Lottery necessary infrastructure and well-trained people, governmen- Total spent in 2013: €9,125,000 tal structures are weak or non-existent in the affected coun- Important impacts in 2013: tries. Communities endure the constant threat of violence, ▪▪ In Congo DRC, 150 paralegals were trained in six territories; police forces offer little or no protection and judicial systems 750 legal consultations were provided resulting in 75 cases are beyond their reach. Moreover, widespread corruption often taken to court. Campaigns reached an estimated 240,000 makes existing systems unfair. This both undermines people’s people through 160 big screenings and 18,750, including trust and encourages them to take the law into their own legal professionals, through 375 smaller screenings in rural hands. Cordaid enables people to organize themselves, and areas. In South Kivu, 14 community groups were supported places them at the heart of the dialogue with civil servants, in peace building and mediation. 8,048 men and women police forces, and other representatives of the judicial system. were reached and 70 conflicts were successfully mediated. Our task, and we are well equipped to take it on, especially by ▪▪ Pilots on Results Based Finance launched in Burundi combining the expertise of more than one Business Unit, is to and Congo DRC to prioritize activities in Security, Justice help bring these diverse groups together. Community-based and Administration; initial results are promising. We innovations, such as 4x4justice help improve access even in further introduced the ‘Restoring the Contract’ program the remotest of rural areas. Cordaid is involved in numerous in both Congo DRC and Burundi aimed at increasing the security and justice-related projects – for full details, please performance of public administration, police and justice visit: www.cordaid.org/en/projects. system at local level.

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▪▪ In Haiti, 300 local Justice and Peace commissions have been Women’s Leadership trained in order to increase their capacity to observe and report on human rights violations. What we do: In many countries, women are rarely heard or ▪▪ In South Sudan, in partnership with local community have space or opportunity to participate in the decision-mak- organizations and churches, over 1,000 community ing or peace processes in their respective countries. Their views members and representatives trained on promoting peace are not considered in peace negotiations or discussions on the and local laws. Over 250,000 people reached through radio future of fragile and conflict areas, even though they are key to broadcasts on peace and how to analyze their local situation all development and economic activities that lead to nation and conflicts to find peaceful solutions – focus also on the building. That is why stimulating and supporting women is an rights of women and girls. Over a dozen community groups obvious role for Cordaid. Our aims are to support women’s have been supported to engage in peace building. Four peace groups in conflict areas. Projects aim to offer opportunities committees have been set up and are actively involved that help women gain skills, economic empowerment and in solving disputes such as clan clashes, conflict over confidence to stand up for their interests. We help them build cattle, and land issues for returnees. Meetings between women’s networks and connect those networks to other larger communities and formal and informal Security and Justice networks/movements, to promote women’s interests/perspec- actors have been facilitated with10 communities now tives with policy makers – locally, regionally, nationally and actively trying to reduce the number of small arms. internationally. Women’s Leadership is also concerned with Three conflict profiles were made, analyzing the root and enabling women to control their fertility. Equally important is immediate causes of conflict. Analyses were discussed with the education of men on women’s rights and crucial position in 30 major stakeholders, such as government officials, county society. This all starts with knowing women’s situation and commissioners, local Chiefs and the UN mission (UNMISS). what needs to happen to improve that situation. Our Women’s ▪▪ Start of 4x4justice expansion to Burundi, South Sudan and Leadership activities are helping to make a difference through Afghanistan. numerous projects. Find out more at www.cordaid.org/projects. Where we work: Afghanistan, Burundi, Colombia, Democratic Republic of Congo, Guatemala, N.E India, South Sudan. justice 4x4 Funding sources: MFS II, Dutch government Funding 4x4justice offers a scalable and affordable method of improving Total spent in 2013: €9,298,000 access to justice in regions where formal judicial systems are Important impacts in 2013: out of reach. It is not a replacement for formal systems but ▪▪ Influenced NATO policy on Afghanistan transition process the complete process, based on a citizen-centered local ▪▪ Barometer (see sidebar) roll-out in North-East India, approach, leads to structural improvements in the formal Colombia and Afghanistan. judicial system.

How it works Peace and security barometer – identifying 4x4justice is based on a standardized process that can be women’s concerns tailored to local community needs. It includes a toolbox with It is important not to generalize on women’s concerns, a variety of options for services. Getting the message out to because at local level different fragile contexts offer unique local people can be managed through campaigns on video, threats; however there are some critical issues that women radio, TV, social media, including Facebook. Four steps have experience that can be attributed to every fragile country we been defined for 4x4justice, starting by selecting communi- work in. That is why we have developed a community-based ties and increasing knowledge of their needs through to consultative approach to identifying the key issues of concern scaling up. We prepare, then launch, including the training called the ‘barometer for local peace and security’. The of paralegals and organization of mobile judicial clinics. barometer approach is a departure from traditional research Subsequently we evaluate and improve so that we can scale methodologies because it targets women at the very local up to other regions and countries. At present, we have level and they define their peace and security priorities. The 4x4justice programs in Congo DRC and are preparing barometer we began piloting in three countries in 2013 goes expansion to Burundi, South Sudan and Afghanistan. to the heart of rural and remote communities to map what is Download our 4x4justice report at www.cordaid.org/en/ happening at grass-roots levels and is executed by women for publications/4x4-justice. women. This means that the simple process of doing the survey acts as a way for women to connect. Women who perhaps had never spoken to each other now go door to door and openly discuss issues. Once a community identifies the main issues, Women’s Leadership works closely with other ‘ If these judicial clinics operated in all territories, Business Units on resolutions. For example, if justice is a primary concern, then Security & Justice’s mobile justice sexual and gender-based violence would be systems, such as 4x4justice, can help improvement. reduced.’ Amani Cirimwami Magistrate, Congo DRC

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Healthcare The results of Result Based Finance (RBF) What we do: Cordaid works on better and accessible healthcare Cordaid co-created and was one of the first organizations in the poorest and most fragile states. Around 70% of the worldwide to introduce the Result Based Financing (RBF) world’s population still has no access to a doctor or a hospital. approach to healthcare in sub-Saharan Africa. According to This is because medical care is too expensive, too far away or the World Health Organization, the cost of healthcare can too inadequate. We work with comprehensive, community- be reduced globally by 20 to 40% by working more efficient- based programs, often based on Result Based Financing, to ly, by motivating staff better, and by fighting corruption. improve local accessibility and increase the quality of care, This is what RBF does by improving access to and the especially in rural and remote areas. Women’s health is a quality of health services for the poorest and most vulnera- special focus. Women and especially mothers suffer hugely ble people, especially in isolated, rural areas. The essence from poor healthcare. A woman dies every two minutes from of RBF is a direct link between funding and results: either pregnancy-related causes or in and after childbirth. healthcare providers are only paid when they can demon- Many of our projects concentrate on improving care during and strate that either their medical services have been im- after pregnancy. We have effective programs to increase the proved and they have effectively treated more patients number of midwives in many of the countries we work in. with the allocated funds. Empowerment of users is crucial From a prevention perspective, our sexual and reproductive in the way we organise healthcare. By dividing roles and health programs offer sound family planning advice, also to creating splits of functions, we also increase transparency men. Young people require a different approach. They often and governance. Measuring client satisfaction is new in find it hard to discuss private matters or seek advice or help Africa but a key element in our approach. from health services that can be difficult to access. In Rwanda, we launched a three-year project called ‘Making sexual and Healthy local care reproductive health services work for the next generation’ to As always, our approach is community based and is prevent unwanted pregnancies and the spread of HIV/AIDS concentrated on women’s health, although improvements among young people. Hospitals will open youth-friendly in this area have a knock-on effect to all health care facilities, youth centers and schools will provide health provided. We begin RBF locally, focusing on improving education. As always, our community-based approach to all and extending prenatal, obstetric and postnatal care. our projects mean dialogues on responsible parenthood will We also offer advice on family planning and the impor- be stimulated with community and religious leaders. tance of safe childbirth. Once the efficiency and effective- ness of the program has been demonstrated locally, we Global Fund collaboration then upscale to regional level. By definition, RBF has in Cordaid has been closely involved in getting antiretrovial place a series of checks and balances – payments are based therapy (ART) to people who need it to survive HIV/AIDS in on demonstrable results. many countries. In six provinces in Congo DRC, an area almost as large as the whole of Western Europe, Cordaid collaborates This approach has been so effective in some countries that with the Global Fund that was set up in 2002 to fight three Rwanda and Burundi have already implemented it as pandemics – HIV/AIDS, tuberculosis and malaria. Normally, national policy. Zimbabwe is currently in the process of the Global Fund works with governments. Our expertise in exploring RBF as base for national policy. These are real effective development of quality healthcare led to our selection outcomes for us. We estimate that in the near future RBF as Global Fund partner in Congo. Currently, Cordaid and our will have been implemented in 22 countries, including local program partners are ensuring 50,000 people receive Afghanistan and other fragile and conflict areas. In life-saving ART. All Global Fund programs are strictly regulat- war-torn Central African Republic (CAR), the number of ed and monitored. Payment to partner organizations only people with greater access to healthcare has increased up happens when they show results. As with Cordaid’s own to 50% through our use of RBF, while costs were reduce by results-based financing system, this way of working proves to between 25 and 50% over a two-year period. We were strengthen the existing healthcare system and to increase the obliged to evacuate our people from the worst areas of CAR quality of patient care. in late 2013 but the work, including the supply of essential medicines has continued. Critics of RBF often contend that Expanding RBF if the subsidies stop, then the system is not sustainable. The RBF system we co-created more than a decade ago has We counter that criticism with experience on the ground. proved viable in many countries. Today, it forms the basis of We launched RBF in many areas of Congo DRC. After national healthcare policy in seven countries. We continue the most recent conflict, we found the system was still to expand RBF in healthcare and increasingly in other areas. functioning effectively in many of those areas. A pilot RBF in education carried out over the past five years in Congo DRC has also proved the effectiveness of this approach – see also Child & Education. All our Business Units continue to explore ways to transfer RBF to their projects or to find integrated approaches to specific issues using this proven concept. That is impact.

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Cordaid and our partners continually develop, implement, monitor and improve numerous healthcare programs and Extractives - restoring the Delta projects in the most fragile contexts in the world. All our An innovative example of our extractives-related activities projects and the many authoritative publications we generate in 2013 is the clean-up project in the Niger Delta. For more can be found at www.cordaid.org/healthcare. than 50 years, the Niger Delta has been drilled systemati- Where we work: Afghanistan, Bangladesh, Burundi, Cameroon, cally for its oil reserves. Little thought has been given to the Central African Republic (CAR), Congo Brazzaville, Congo DRC, fact that the delta is also one of the world’s largest wetlands Ethiopia, Ghana, Haiti, Malawi, Rwanda, Sierra Leone, South and home to Africa’s biggest mangrove swamp. The local Sudan, Uganda and Zimbabwe. population’s food sources – fishing and agriculture – Funding sources: Cordaid Memisa, Global Fund, World Bank, have been negatively impacted, so has their health. Dutch government funding We are working with partner SDN and local communities Total spent in 2013: €74,992,000 on strategies to tackle the pollution. If the delta can be Important impacts in 2013: restored, there is potential for the mangrove swamps to ▪▪ In Congo DRC, we have over 50,000 people on Antiretroviral be exploited in a more environmentally responsible way.

therapy for HIV/AIDS Mangroves absorb seven times more CO2 than trees and ▪▪ 7 governments adopted Results Based Finance as part of the size of the swamps could generate income for local their national health systems communities through the sale of carbon credits. Tourism ▪▪ The basis was developed for a health investment fund that is another sector that would benefit the local people. allows health facilities to become social entrepreneurs and get loans to improve the quality of their services ▪▪ In Zimbabwe 3.5 million people are reached through in the upscaling of an RBF program Child & Education ▪▪ In the African great lakes area a Public-Private Partnership was created to improve sexual reproductive rights and the What we do: Although progress on giving children access to availability of modern contraceptives for the next better education has been made, there are still more than generation. 61 million kids with no access to primary schooling. Many of them but not all live in the world’s most fragile and war-torn regions. Girls especially continue to suffer exclusion. Orphans Extractives and homeless kids are at greatest risk of abuse and exploita- tion. In some countries, girls can end up in enforced prostitu- What we do: Oil, gas, minerals and metals are an important tion. In other countries, too many children leave school source of income for resource rich developing countries. When without the skills that would enable them to find a job. In the well-managed, these natural resources offer a real opportunity most vulnerable communities, Cordaid acts as a change maker, to achieve sustainable economic growth and reduce poverty. bringing together communities to improve education and However, in many fragile societies all too often communities healthcare for children. We use the Balance Change Model near mining sites or oil wells are confronted with dire poverty, that is designed to generate social changes that can stimulate environmental pollution, insecurity and violent conflict. transformation from fragile to flourishing communities. For Cordaid’s Extractives Business Unit works for a more equal all our Child & Education activities, go to www.cordaid.org/ distribution of natural resource wealth, a stop to human rights projects. violations and ecological degradation. We do this by supporting local communities to empower civil society to achieve account- CORDAID’S BALANCED CHANGE MODEL (BCM) able government, a responsible corporate sector and a sus- tained and well-balanced interaction between all parties. You can find all our Extractives projects at www.cordaid.org/ projects. Where we work: Central African Republic (CAR), Chad, Colombia, Congo DRC, Guatemala, Haiti, India, Indonesia, Nigeria and South Sudan. relevance Funding sources: Dutch Ministry of Foreign Affairs Total spent in 2013: €4,187,000 Important outcomes/impacts achieved: access quality ▪▪ Lobby activity in South Sudan leads to 3% share (around $200 million per year) of oil revenues for local communities project goal n education n community chain research finance communication

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Disaster Reduction and Resilience Making changes for disabled kids In many countries, disability is seen as a stigma on the What we do: The poorest are always hit hardest by disasters. family. That is why we are funding a number of projects They often live in the most dangerous locations and are most with local partners aimed at improved care for children susceptible to natural disasters such as floods and droughts. with disabilities. Through our program with the They are the people who are forced to leave their homes, jobs Bangladeshi Pidim Foundation vulnerable children receive and farmland when disaster strikes. Cordaid believes that medical and social support while their parents, teachers there is more to disaster response than emergency humanitar- and communities are able to gain a better understanding ian aid. We think that a disaster, however terrible the immedi- of disability. A similar project in Cameroon aimed at the ate consequences, can sometimes prove an opportunity to disabled is now generating significant improvements in rebuild society in a fairer and more sustainable way. Moreover, impacts through the introduction of RBF and the Balance by identifying potential disaster risks in advance and working Change Model (BCM). Over 20 years ago, a Belgian priest set with local communities and organizations to mitigate these, up a clinic for the disabled in Batouri, Cameroon. It is we believe local people can reduce the negative impacts of currently staffed by 15 healthcare professionals but in a disasters. We call this Community Managed Disaster Risk country where disability is hidden, there were few patients. Reduction. That is what our Disaster Risk Reduction and Cordaid’s approach was to actively search out the disabled, Disaster Response (DRR&DR) Business Unit is tasked with. discuss possible (medical) help with the families and (Visit www.cordaid.org to download our report: 10 years CMDRR) communities and get treatment for the children. This has Where we work: Afghanistan, Bangladesh, Central African resulted in a huge increase in patients seeking help, up Republic, Congo DRC, El Salvador, Ethiopia, Guatemala, from 350 to 1,100 in the space of one year. Haiti, Honduras, India, Indonesia, Kenya, Lebanon, Malawi, Pakistan, Philippines, South Sudan, Syria, Turkey, Uganda, Zambia. Funding sources: SHO, Cordaid Mensen in Nood The elements of the Balance Change Model are: Total spent in 2013: €23, 644,000 ▪▪ Focus on community participation and social accountability in schools; ▪▪ Creating commitment and transparency throughout the Community Managed Disaster Risk Reduction education system; and Disaster Response ▪▪ Implementing strong and tested education solutions and Although Cordaid is front-line in disaster events, our focus best practices; is also on helping fragile states and conflict areas identify ▪▪ Introduce and implement Result Based Financing (RBF) for and anticipate risks so that they are better prepared to deal education, using our experience from the healthcare sector; with them. In 2013, we were engaged in programs and ▪▪ Focus on research and learning for sustainable change with projects in 21 countries. Haiti is a good example of how we (inter)national stakeholders. shift our focus from emergency aid to a more structured approach and disaster risk reduction. In the wake of the Where we work: Bangladesh, Cameroon, Central African 2010 earthquake Cordaid acted immediately by providing Republic (CAR), Congo DRC, Ethiopia, India, Malawi, food, shelter and medical care. Working together with Philippines and Uganda. 8,000 families, 6,208 earthquake- and cyclone-resistant Funding sources: Cordaid Kinderstem, homes were built and some 50,000 Haitians were given ASN Bank, Dutch Ministry of Foreign Affairs, Ineke Feitz psychosocial care. In the aftermath, our office in Port au Foundation Prince began to offer more structural, future-oriented Total spent in 2013: €6,819,000 support. In collaboration with local organizations and Important impacts in 2013: authorities Cordaid is working on disaster resilience and ▪▪ Results of first education program based on Results Based disaster prevention, increased food production and higher Finance in Congo DRC: 36 new schools constructed; a 50% agricultural income for small-scale farmers. We are also increase in girls attending school; almost 5,000 very striving to provide better accommodation for poor people in vulnerable children supported; access to books the cities. This is being achieved through new forms of and other learning tools almost doubled. This program financing, introduction of sustainable agricultural tech- demonstrates that Results Based Finance can be nologies, stimulating entrepreneurship among small-scale implemented successfully in the education sector. farmers and urban slum dwellers and by making people at community level more resilient to the consequences of natural disasters. (Watch the video on www.cordaid.org/en/ news/haiti-building-trust/)

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farming families restored their coffee production, DRR&DR program in practice participating in the processing and marketing of their According to a 2013 report by the Centre for Development crop.150 model farmers doubled their production of Innovation at the University of Wageningen in the potatoes; 9,000 other farmers have monitored progress. At Netherlands, Cordaid’s DRR&DR program works. The study least 500 model farmers increase production of plantains shows clearly that the program’s biggest strength is the and potatoes through the introduction of new varieties and emphasis on training. Communities often know best what technical skills. Small-scale farmers’ organizations are the disaster risks are in their environment. They identify involved in new agricultural legislation and a new land act. the risks themselves and make plans on how to handle ▪▪ In Haiti, at least 1,000 local farmers, members of 10 these threats. This approach ensures our interventions are associations involved in fruit processing, produced quality based on a specific demand from the local communities and and quantity products, and managed their businesses in a makes them responsible for the risk reduction measures, more profitable way. 5,500 small-scale family farms in Haiti such as water reservoirs and grasslands. The study showed reduced their food vulnerability through increased access to that at times of disaster these measures could extend the agricultural inputs and services. self-sufficiency period by months before external emergen- cy aid is required. The researchers recommended more focus on monitoring, evaluation and sharing learning experienc- Helping farmers help themselves es. For more on our programs and where we are active, In 2013, we began a livestock feed-bank program in Uruzgan, please visit: www.cordaid.org/topics/disasterresponse. All Afghanistan, that includes training in managing stocks of our DRR&DR projects can also be reviewed on the website. winter feed for cattle, accounting and bookkeeping. Now, 38 feed-banks for storing winter feed for cattle have become self-sustaining. The nutritional status and income levels of 1,500 poor families have improved through food diversifica- Food Security tion (poultry production and milk goats). Often, women play a key role in food markets. Working with colleagues in What we do: Cordaid supports the development of food security both Women’s Leadership and Security & Justice, we are in some of the world’s toughest regions. We are not involved in helping to give them a voice. The Sawulia Farmers’ Food Aid. We work with communities in fragile and war-torn Association in Makeni, Sierra Leone, has a majority (57%) of areas so that local small-scale farmers are able to restore food women. Our program there aims to help the 720 farmers in production. Our programs support farmers in growing sur- 48 cooperatives diversify crop chains to improve economic pluses for local markets through training, also to reduce performance. post-harvest losses and strengthen their position. By bringing together local people and stimulating entrepreneurship, we can help local communities become more self-sufficient and potentially reduce tensions. Currently, we are developing a new Urban matters tool that will help chart and analyze what communities need to improve their food security. Self-sufficiency is the key aim in What we do: Slums are full of potential because slum dwellers all our food security programs and projects. To see what we are are already taking action to improve the quality of life in doing in fragile contexts and (post-) conflict areas, please visit their communities. Together with local communities, we www.cordaid.org/projects. are working on what we call ‘smart solutions for slums’. Where we work: Afghanistan, Burundi, Congo DRC, Haiti, We connect people living in slums with companies, authorities, Sierra Leone, South Sudan and Uganda. knowledge centers and investors. This connection helps people Funding sources: Dutch Ministry of Foreign Affairs; EC living in slums to work together on new homes, power, Total spent in 2013: €8,667,000 sanitation, clean drinking water, waste disposal, employment, Important impacts in 2013: safety and resilience. Currently we are helping local communi- ▪▪ Worldwide, 5,000 farmers have been trained in food ties put our ‘smart solutions’ to work in San Salvador, Port-au- agricultural practices and in farming as a business, 4,500 Prince, Guatemala City, Cape Town, Nairobi, Kisumu and Addis farmers increased their production volume and three Ababa. farmers’ organizations have been strengthened. Where we work: El Salvador, Ethiopia, Guatemala, Haiti, Kenya ▪▪ In Afghanistan, 886 female farmers have been trained in and South Africa. agricultural productivity and business skills and have better Funding sources: Dutch Ministry of Foreign Affairs, European access to markets. 2,061 farmers have been able to increase Union, local and international private-sector partners and their production output, while 4,400 local farmers have investors been organized and trained in farming cooperatives. Total spent in 2013: € 1,732,000 ▪▪ In Ghana, 10,650 farmers have improved their income levels Important impacts in 2013: through access to rural financial services. ▪▪ Lack of employment opportunities, public recreational ▪▪ In Uganda, 5,700 farmers have better access to agricultural areas, green spaces, proper housing and basic services inputs & services and increased their production output. create poor living conditions in Mejicanos, San Salvador. ▪▪ In Congo DRC, more than 1,000 female farmers increased There is little social cohesion among the more than 23,000 their rice production and strengthened their position inhabitants. Youth gangs and crime make the neighborhood towards traders through collective storage and sales. 7,500 unsafe. Community organizations try to improve conditions

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but lack the resources to find long-term solutions. Our smart ‘ Four years after an earthquake in Haiti that made solution was the creation of a sustainable recreational area in one of the most crime-ridden areas of San Salvador. We 1.3 million people homeless and despite massive involved local and international private-sector partners and international efforts, 200,000 people are still living investors in plans to develop City Park San Salvador, a in tents. In some areas, houses have been built, sustainable and replicable project that has huge potential impact for the people who live there: improves safety to but many stand empty and vandalized. For some benefit 4,700 children; over 100,000 people will have access reason, people preferred to stay in their old houses, to a green public space; 1,500 people will attend educational in crowded rooms, without water or electricity and activities to help obtain employment; 250 families will have access to locally produced food through urban agriculture. in highly stressful and dangerous circumstances, ▪▪ In Ethiopia, Cordaid and partner Enviu have introduced the rather than in the houses built especially for them. first recruitment agency in Addis Ababa. The UrBan LinK And Haiti is not the only country where efforts to brings together expertise and financial support from local and international companies to help employers find talented house the slum dwellers have been challenging. and motivated employees and assists talented and Cordaid’s approach to breaking the cycle is the motivated young professionals find fulfilling work. Training so-called multi-stakeholder approach. In our view, and coaching are part of the services on offer to optimize career prospects. Through a buddy system, employees in the the communities have the solutions. We are just last phase of the training cycle will guide starters. Addis making sure stakeholders get to hear about them.’ Ababa has a population estimated at around 3.5 million and is fast becoming a hub for (inter)national companies eager to Mariana Vazquez enter this emerging market. Through The UrBan LinK, they Slum development expert will be able to recruit skilled and motivated local employees. ▪▪ In South Africa, we have helped the City of Cape Town (CoCT) prepare a grant proposal for an Integrated Public Transport Network. This network will serve the townships, giving Entrepreneurship residents better access to employment in the city center, to healthcare and to higher education. At present, the What we do: (Post-) conflict regions are not only unstable and transport infrastructure linking the townships is expensive, unsafe, they also have inadequate infrastructure, rampant congested, unsafe and unreliable for the 4 million people inflation and little local production for their own local markets who live there. As the proposal enters the development or for potential export. At the same time, fragile regions are the phase, our potential role will be to provide technical areas that offer a lot of opportunities as their people want to expertise and liaison between the various CoCT depart­ progress in life. In spite of the very difficult circumstances, ments on the project’s social and economic components. the informal economy can flourish. This is because many We would be involving stakeholders in the design phase people are motivated to generate an income by starting a and helping to shape the socio-economic character of the business. These people require support and training. At Cordaid, public transport interchanges (PTI). The idea behind joint we do not make loans (microfinance). Cordaid’s approach starts design development of PTIs is to stimulate the creation at community level. We aim to support the restoration of local of multifunctional hubs that combine both effective and economies in the most rural and remote regions by supporting efficient public transport and meet the other needs of entrepreneurs. This means we make conflict-sensitive Business end-users, such as (social) services and retail. Development Services (BDS) available to them, mostly in combination with access to finance. We train local BDS provid- ers and connect them to local small and medium-sized busi- Cordaid & Enviu – incubating ideas nesses. 2013 was a year of transition from a focus on microfi- New (business) ideas are essential in a rapidly changing nance institutions and (agricultural) chain development international development cooperation world. That is why towards more general (conflict-sensitive) BDS in fragile states. Cordaid is partnering with Enviu, a Netherlands-based In this way, we aim to help entrepreneurs grow their businesses organization that kick-starts companies whose products through the expertise they gain through training and from the and/or services aim for environmental and social impacts. services available to them. Enviu currently works primarily in the Netherlands, Where we work: Congo DRC, Ethiopia, Sierra Leone and Ghana and India (www.enviu.org). Our partnership is South Sudan. about searching out good, sustainable business concepts Funding sources: Dutch Ministry of Foreign Affairs, EC and helping them grow. The idea for The UrBan LinK, Total spent in 2013: €1,529,000 Addis Ababa’s first recruitment agency, came out of that Important impacts in 2013: partnership. And our cooperative concept to support the ▪▪ Launched a study to introduce mobile banking in Sierra more vulnerable in the Netherlands is another example Leone of ‘out of the box’ innovation and creativity. ▪▪ Working with Cordaid Investments, training local market women to improve margins in South Sudan ▪▪ Exploring set up of Business Booster in Ethiopia

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Poverty in the Netherlands Safe mobile banking in Sierra Leone Sierra Leone is a cash-based economy. Only 10% of the What we do: Cordaid not only creates opportunities for the population uses banks. Theft and corruption are endemic. most vulnerable people around the world, we also support The challenge was to find a way to manage money transfers initiatives to tackle poverty at home – support we have been more securely. We initiated a study on mobile banking providing since Cordaid Mensen in Nood was established in whose results were published in 2013 (see www.cordaid.org/ 1914. In the 2013 Poverty Report (Armoedesignalement 2013), en/publications). Although few people here have a bank it was estimated that the number of people living on a low account, almost everyone has access to a mobile phone. income in the Netherlands had risen to over 1.3 million (total Trusted microfinance institutions with a comprehensive population in 2013: 16.8 million). While Cordaid remains network of branches will manage the low-cost transac- convinced that care for the vulnerable in society is essentially tions. This way, people can make secure mobile payments a government responsibility, we are also aware that there are through a well-known financial institution, thereby countless community initiatives from people who want to reducing the risk of theft or loss. change their situation themselves. This is where Cordaid Bond zonder Naam (literally: Nameless Association) that was set up during the 1930s Depression, comes in. We invest in communi- ty empowerment, by bringing together parties that can help Investments initiatives, such as local authorities, companies and social organizations, such as Enviu. By creating a support ‘communi- What we do: If people are to reconstruct their communities, ty’, we can help get these initiatives off the ground. And by if they are to restore trust, regain control over their lives joining forces, we can help disadvantaged people, often the and shape their futures, then they need access to finance to long-term unemployed, take active part in their local commu- help kick-start the local economy. This is where Cordaid nities so they can ultimately support themselves. Investments, with our long experience of working in fragile Where we work: The Netherlands and (post-) conflict areas, comes in. These are challenging areas Funding sources: Cordaid Bond zonder Naam and Cordaid and few potential donors have the appetite to invest there. Mensen in Nood So providing finance in high-risk areas requires expertise in Total spent in 2013: €586,000 conflict transformation as well as financial management. Important impacts in 2013: Equally important is real knowhow and insight into local ▪▪ At the end of 2013, we helped local communities launch two conditions so that any investment is responsible, but takes self-help cooperatives in the city of Breda. Both cooperatives into account the fact that the more fragile the area, the more are run by people who have been receiving social assistance we have to be prepared to accept high risk and low returns for a long period of time. Initially, they will retain benefits – especially in finance. Cordaid Investments is about creating and in the longer term will become self-supporting. opportunities for investors and access to capital for small and ▪▪ We supported a farmers’ cooperative in Arnhem to develop a medium-sized enterprises (SMEs) in fragile. Through its ‘Green and Social Supermarket’ concept, which they are dedicated funds, the Investments Business Unit focuses on planning to start up in 2014. generating both a financial and social return for investors. ▪▪ Throughout the Netherlands we supported a total of 50 A significant share of investment goes to microfinance projects of organizations working to reduce poverty and institutions that provide capital and loans to SMEs in agricul- social exclusion. For example, the DebtAidBuddy program ture and fragile states. However, we are looking to increase where volunteers are trained to help people with financial focus on mid-sized enterprises as they have the potential to problems sort out their issues, deal with the authorities create jobs in areas where unemployment is a major social and to make a budget. The National Service Desk supports issue. Work means an income and resulting purchasing power 40 local organizations and about 1,000 volunteers. can stimulate growth in prosperity for local communities. By ▪▪ Cordaid Bond Zonder Naam's 'Individuals Fund' granted 372 investing in prosperity, investors and investees can contribute requests for urgent financial support. These requests relate to the development of flourishing communities in some of the primarily to people on very low incomes and who, through world’s most fragile contexts and (post-) conflict regions. no fault of their own, find themselves in financial trouble. Where we work: Bolivia, Ethiopia, Honduras, India, Kenya, For example, we can help prevent imminent eviction. Malawi, Nicaragua, Peru, Philippines, Tanzania, Uganda and A total of 744 people benefited from this support. Vietnam. Important impacts in 2013: Our partner network ▪▪ Cordaid Investments managed two dedicated funds: the Our approach to the challenges facing communities in fragile Rural and Agricultural Fund (RURAF) and Entrepreneurship contexts and (post-) conflict states focuses directly on themes in Fragile Areas Fund. Terms and conditions for RURAF and solutions. We do this by working with communities and investees can be reviewed on www.cordaid.org/en/ expanding the social contract within and between communi- publications/terms-and-conditions-investments. A third ties, state actors and the international communities. To build Fund for Results Based Finance in Healthcare is under flourishing communities, all stakeholders have to work on preparation and should be finalized in 2014. social change. To achieve real and lasting change, we set up coalitions that span private, public and not-for-profit actors who are willing and able to reach out to all constituents, including adversaries. This makes it possible to identify those

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groups that want to contribute to security, empowerment, outcomes and impacts, for example, help to develop Women’s opportunity and governance. Our partners are, therefore, Leadership – some of these numbers are included in our review an indispensable link in our value chain. of BU activity in 2013. But there is more. These numbers do not always indicate ripple effects to surrounding communities, What our partners say inspiring and giving them the confidence to initiate social Cordaid’s new positioning as a social enterprise does not mean change. So our monitoring of programs and projects aims to our network of 617 partners around the world is no longer include the knock-on effects of, for example, pilot programs for essential to our work. In fact, competent partners are rapidly other communities. Moreover, we can also monitor the effects becoming even more crucial as experience, capacity and ability of the Results Based Finance (RBF) approach we introduced in to implement programs in fragile states and conflict areas is Healthcare programs many years ago and is now used by many relatively scarce. In late 2012, Cordaid was included in a joint of our other BUs to ensure quality of implementation and partner survey on 46 northern NGOs carried out by an inde- services to local communities. RBF outcomes are audited every pendent body. Of the 46 NGOs, 16 are Dutch (including Cordaid). quarter and continued funding is dependent on how communi- Participating partners ranked ‘overall satisfaction’ on coopera- ties value the services they receive. In turn, this enables us to tion and collaboration with Cordaid 6th out of the total 46 NGOs. continually improve those services as part of our commitment to Moreover, we outperformed our Dutch colleagues on eight out of helping build flourishing communities. However, we continue 10 factors included in the survey. While gratifying, we scored to pursue better ways to get our beneficiaries’ feedback on the the same as the Dutch cohort on important factors such as impact of our programs – it is a work in progress. management and leadership. Partners want more from us. Capacity building on financial management and more support Evaluation and learning in accessing other sources of funds are two areas where we can Cordaid carries out formal evaluations and research to assess improve. Systematic feedback from beneficiaries is another area the efficiency, effectiveness and relevance of programs and/or where improvement is needed. In fact, Cordaid is clearly seen as specific activities. These evaluations have a dual purpose. One a knowledgeable NGO that shows respect for partner expertise is accountability, the other to help us improve our programs by and added value but needs to improve non-financial support learning through experience. We are a community-driven or- significantly. 77% of those surveyed have participated in Cordaid- ganization and it is therefore crucially important for us to know led knowledge development programs and 72% want more. These and learn from our activities in the 38 countries where include Cordaid’s facilitation of more experience exchanges we work. Cordaid receives significant funding from the Dutch among organizations working on similar issues and to focus Ministry of Foreign Affairs through the government co-financ- more attention on long-term social change. ing MFS-II program, 2011-2015. We are part of an alliance called Community of Change (CoC) that involves 19 other Dutch NGOs. Responding to complaints All are involved in a joint evaluation process that spans the MFS- Although the vast majority of Cordaid’s projects are executed as II funding period. Evaluation relates to capacity development in planned, we do sometimes receive complaints from constitu- a random sample of 10 Cordaid/CoC partner organizations. We ents. These can refer to dissatisfaction on non-compliance with have already generated the baseline report against which the ul- procedural agreements/contracts or not meeting expectations timate findings will be benchmarked and these are due in 2014. on service delivery to a constituent. For example in 2013, we We will report comprehensively in next year’s annual report. received a complaint from another international organization in Cordaid is also participating in another evaluation, this time the South Sudan. We had hired one of the organization’s expat involving 17 CoC partners, on Strengthening of Civil Society. employees who is originally from Kenya. This organization The evaluation includes international lobby and advocacy and complained because it had incurred the relocation and training the Women’s Leadership BU lobby program has been selected costs of bringing this employee to South Sudan. In consultation for review. The baseline report on this evaluation is already with them, we settled the issue by agreeing that future recruit- revealing some interesting findings, such as our contribution ment would be pursued sensibly and avoid getting in each to ongoing discussions on integrating gender in the New Deal other’s way. We treat such complaints very seriously and have a on Engagement in Fragile States. Our BU is closely involved, policy on how such complaints should be managed. There is a also because we are currently the secretary of the Civil Society clear process on managing complaints. We set time limits on Platform on Peace-building and State-building. Activities here responses: confirmation of receipt within two days; a maximum are directed at supporting women’s collectives in making their of four weeks for assessment of the complaint, followed by perspectives know to lobby targets. We have already published response to the complainant. If no satisfactory solution can be several policy papers and reports on these issues, specifical- found, the issue can be forwarded to the Complaints Committee ly from a thought-leadership perspective. Please visit www. comprising the CEO, the Q&C Compliance Officer and the cordaid.org/publications. During 2013 Cordaid further pursued Manager of the Donor Contact Center. the survey initiated in 2011 among partner organizations in 10 countries on their influence on and role in the strengthening of Community-based approach to beneficiaries civil society. Again, publication of results are expected in 2014. Cordaid works with communities that want to help themselves. However, initial indications are that more partner organiza- All our activities are community based; our role is to stimulate tions are involving more community-based target groups and and facilitate. In setting up programs and projects, we obviously constituencies in decision-making on their programs. Another set goals and targets for outcomes and impacts. However, this important finding is that more partner organizations are always begs the questions: how do you measure impact and how sourcing domestic funds – the percentage has almost doubled. meaningful are numbers? We can certainly provide numbers on All of these surveys offer us learning opportunities.

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Our People Training programs Cordaid’s people are crucial to everything we do – from fund- A strategic two-year training program has been put in place, raising through initiating and managing programs to commu- starting in the fall of 2013, to support the changes to a social nicating to raise awareness on our focus areas: fragile states. enterprise. The focus is on acquiring new skills essential to the Without them, we would be unable to get our programs and Business Unit (BU) structure. For example, business planning expertise to where these can generate the best outcomes and and modelling, managing a BU’s financials, proposal writing impacts for beneficiaries. During the transition process that was and tendering are all part of the program. However, it is also launched in 2013, their commitment is helping transform flexible in the sense that time is reserved for issues and topics Cordaid so we can continue our work into the future. It is an that arose during training. Workshops were also organized exciting and challenging time for the whole organization. during 2013 on specific issues. Personnel were instrumental in identifying Cordaid’s organizational risk profile and potential mitigation (see also the section on risk management).

‘ We are very well positioned to interpret what is Health & Safety For personnel in the Netherlands, Cordaid meets all regulatory happening at grass-roots level in the countries requirements on health and safety relating to the workplace. where we work, especially as our local presence Our expats at international offices and colleagues who travel is gradually being increased.’ regularly have frequent medical checks specifically designed for people working in tropical climates. On safety, we have Akinyi Walender comprehensive safety protocols in place and dedicated plans Director of Women’s Leadership and former head of our for each individual country where we work. We have a Safety, South Sudan office Security and Crisis Committee and a Safety Advisor that develop related policies, oversee their implementation and manage crises. Safety training is provided ahead of interna- tional deployment and for visiting staff, with refresher courses Organizing for the future every two years. Our safety protocols proved essential in 2013 as Cordaid is undergoing a radical transformation – from a Cordaid people were evacuated from two countries – South subisdized ‘donor’ organization with close to 100 years of track record behind it to a social enterprise where a new mindset will be crucial to continuity for this century. To bring about the changes in expertise essential to a social enterprise approach ‘ Implementing programs always has challenges. to our work, there have been changes in the composition of the team in The Hague. At the start of the transformation process, And you have to get things right. Following the there were 245 FTEs. As Cordaid shifts to greater involvement earthquake in Haiti, a lot of NGOs came in for in program implementation on the ground, we have begun criticism for moving too slowly but also for not reinforcing our international offices in the fragile states and conflict areas where we do the much of our work. At year-end, consulting local government and organizations. this number was 234 FTEs in The Hague and 238 FTEs in our That is not usually a mistake Cordaid makes. offices around the world. Some of our people abroad are expats; However, in our enthusiasm to launch Results- others were recruited in 2013 from outside Cordaid. As a result, we have both an expat and inpat policy in place. English was Based Finance (RBF) in provincial healthcare, introduced as Cordaid’s first language in 2013, anticipating the we went ahead and began setting up before the expansion of our international team. local healthcare authorities were fully on board.

Flexible workplace RBF has proved extremely successful in a number The transition to new challenges is being supported by a of countries and we’re pretty passionate about number of practical organizational shifts. Cordaid will be the advantages. It was not that the government piloting flexible work in 2014. The aim is to provide a more inspirational working environment for staff in The Hague. was against the concept but rather that we acted In real terms, this means opening up office space so that our too quickly and no policy was in place. That has people have so-called activity-related workplaces. The pilot since happened and the government has opted to begins with a significant group of volunteers who can test out the new way of working and report back on the experience cooperate with another NGO. We will be closing before it is implemented for the whole organization. Working the local provincial office we set up. This was a from home will also be an option for short periods. The key real lesson for us: don’t rush, and before taking requirement for the flexible working program is systems geared to work on the move. During 2013, the ICT team imple- action build up local networks and buy-in more mented and began rolling out improved systems that will thoroughly…’ provide remote access to data and other essentials, also for teams in offices around the world. Jan Voordouw Cordaid’s country director in Haiti

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Sudan and the Central African Republic. There were no injuries whole staff was surveyed on general and specific satisfaction as this was a precautionary move and all personnel have since points. Results are shared with employees at regular Cordaid returned to their work locations. All staff were offered psycho- Mornings. Minor issues are tackled immediately. Larger points logical assistance following the evacuation. can take more time to resolve. Action to be taken is also posted by the Board of Directors on the intranet. All personnel in Monitoring health The Hague are also represented by an active and committed The Human Resources (HR) team is responsible for developing Works’ Council. It meets at least twice a year with Supervisory and monitoring policy on working conditions. The results and Directors and has regular meetings with the CEO. Cordaid’s plans for the current year are reported annually to the Board of Works’ Council provides major input on a variety of topics and Directors. Every two weeks, the ‘Cordaid physician' visits us to was involved in the planning and implementation phases of give advice to both employees who are absent due to illness and the transition to a social enterprise. During 2013, other topics to managers on how to monitor this process. Such dialogues included the ‘Inpat policy’ and a proposal for performance are part of the established process of helping staff return to incentives. The Works’ Council has been closely involved in work, usually involving a so-called reintegration process. In the developing our flexible workplace pilot that will be launched second half of 2013, HR organized meetings for groups of in 2014. managers to improve their knowledge of these processes. Our goal is to keep absenteeism due to illness to below 3.5%. The Looking ahead average for 2013 was 4%, so work is still needed here. A point that emerged from the ongoing transition training program and the risk workshops with participants from the Whistleblower Code Board of Directors, senior managers and members of the OR was Cordaid has in place a code for potential whistleblowers. We the need for clarity on organizational goals. In early 2014, the encourage and value the report of suspected irregularities and Board finalized and began implementing the so-called ‘One there is a clear and confidential reporting line. Employees who Cordaid Contract’. The contract provides a number of clear goals make reports in good faith are guaranteed confidentiality and to be pursued by the whole organization throughout 2014 and their position shall not be disadvantaged as a result. We have a beyond. These aims include both aspirational goals and practical counsellor structure in place and both the Chief Executive issues that need to be resolved. There will be an intranet in place Officer and Chair of the Supervisory Board can be approached that is accessible to all employees, also in the international directly with reports. Employees receive written feedback on offices. All staff are being asked to confirm their commitment any report within eight weeks. Furthermore, Cordaid has a to the contract so that all have clear goals on which to work. well-established Code of Behavior. Three colleagues have been designated as councillors who can be approached if employees HEAD OFFICE COUNTRY OFFICES feel they have treated unfairly. The counsellors act as confiden- Number of FTEs, 234 (2012: 245.5) 238 (2012: 179) tial intermediaries. end-2013

What our people say Number of staff, 267 (2012: 271) 238 (2012: 179) end-2013 Internal communication is an indispensable part of Cordaid and regular staff meetings are well-attended. The intranet site Gender split 64% F/35% M 34% F/66% M is a good resource for general communication and during 2013 Gender split: 60% F/40% M the so-called ‘Cordaid Morning’ was introduced. These are senior positions held on a regular basis and offer a good opportunity to share Nationality 90% Dutch/ 31% Dutch/ ongoing issues and inform colleagues on developments. 10% other nationalities 69% other nationalities Cordaid carries out at least quarterly staff surveys. In 2013, the

AGE RANGE EDUCATIONAL LEVEL (ALL EMPLOYEES)

0.8% 0.8% 10.8% 10.8% 16% 16% 20.2% 20.2%

61% 61%23% 23% 35.8% 16-25 years35.8% 32.5% 32.5% Secondary vocational 26-35 years education 36-45 years Higher vocational 46-55 years education 56-65 years University education

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FUNDRAISING AND FUNDING

In 2013 and in line with our new organizational structure increased significantly, also due to increased success rates in and openness aims, we have begun upgrading our reporting focussed tendering. Private and family donor behavior is system. Through the switch to a Business Unit structure changing. This shift requires us to be more creative and and in anticipation of changing reporting guidelines from innovative in the way we attract funds through our five institutional donors, we want to be able to provide much Cordaid charities: Cordaid Mensen in Nood (People in Need), more detailed accountability. The new system will enable Cordaid Microkrediet, Cordaid Bond zonder naam, Cordaid reporting by individual project rather than by program Memisa and Cordaid Kinderstem (Child’s Voice). However, in only. Our international offices will be networked into the spite of these behavioral changes, our private funding base new system and will also be able to report using the same grew from 316,000 in 2012 to 324,000 in 2013. Although the system from 2015. funds raised in 2013 were down on the previous year, the larger funding base gives us more opportunities to target private and Our full financial statements can be found on page 34. This family donors for specific programs. is a summarized overview of the main income and spending. Income and expenditure in 2013 Our funding in 2013 Cordaid’s activities are funded by a broad range of donors and X €000 2013 2012 funding partners. The Dutch government’s development Total income 181,054 129,345 cooperation co-financing (MFS) will continue to provide a substantial share of our funding until 2016. However, we are Totel expenditure 176,811 123,867 in the process of expanding our funding base to ensure ▪ spent on programs/public awareness 166,428 111,951 continuity of our activities into the future. Funding from other institutional donors increased as a result of our efforts ▪ cost of generating funds 6,488 7,240 to diversify sources of finance. Funds from organizations such ▪ management & administration 3,895 4,676 as the Dutch Ministry of Foreign Affairs, the World Bank, the Global Fund & United Nations and the European Union

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Where our income comes from:

Our income Government grants X €000 2013 2012 X €000 2013 2012

Own fundraising 28,330 30,388 Dutch government – MFS II 71,535 66,700

Third party campaigns 16,324 9,847 Dutch government - Alliances 3,974 3,937

Government grants 130,744 82,391 Dutch government – Other 13,893 -420

Gains on financial assets 4,144 3,966 World Bank 11,038 2,721

Investment income 849 2,753 Global Fund & United Nations 21,376 7,884

Other income 663 0 European Union 2,272 1,458

Total incoming resources 181,054 129,345 Other 7,656 111

Total government grants 130,744 82,391

Funds raised by our labels X €000 CORDAID CORDAID CORDAID CORDAID CORDAID- CORDAID TOTAL TOTAL GENERAL MENSEN KINDER- MEMISA MICRO- BZN 2013 2012 IN NOOD STEM KREDIET

Donations & gifts 269 6,139 5,972 7,174 491 279 20,324 18,781

Mailing campaigns 0 171 3 109 12 0 295 549

Legacies 139 3,679 410 3,219 80 121 7,648 10,975

Materials sold 0 0 0 0 0 63 63 83

Total 408 9,989 6,385 10,502 583 463 28,330 30,388

Where our funds came from in 2013 Where our funds came from in 2012

Dutch government MFS II 12% 13% Other Dutch government 93% 20% Institutional donors Own fundraising 15.5% Other* 39.5% 23.5% 51.5%

23% 7% 9.5% 80% 10% 2.5%

*Our ‘other’ income is from gains on financial assets/Investment income/other income and third-party campaigns.

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What we spent in 2013 Total spending in 2013 & 2012 Cordaid spent a total of just over €166.4* million on programs 2013 2012 and projects in all our focus areas in 2013. Program spending/public information 166,428 111,951

How our income was spent in 2013** Cost of generating funds 6,488 7,240

Management & administration 3,895 4,676 PROGRAM SPENDING IN 2013

Security & Justice 9,125 Non-program expenditure Urban Matters 1,732 Cordaid could not pursue its programs and projects in the Extractives 4,187 field without the support of the administrative, fundraising, campaigning and other essential activities in both The Hague Women’s Leadership 9,298 and in our field offices around the world. Our non-program Disaster response 23,644 costs related to fundraising in the Netherlands are 21% of Healthcare 74,992 total income, well within the maximum (25%) allowed by

Child & Education 6,819 the independent Central Bureau for Fundraising (CBF) that oversees charitable organizations in the Netherlands. Entrepreneurship 1,529

Food Security 8,667 Internal audit

Investments 7,875 Cordaid carries periodic internal audits on all departments, Business Units and field offices. Through the reorganization of Cordaid Netherlands 12,988*** Cordaid launched at the start of 2013, reporting structures have Public information 5,572 changed and it is taking time to adjust to the new practices. By increasing reporting on audits carried out twice yearly, we have * the total program expenditure of €166,428,000 includes project management, been able to identify issues and set clear targets for improve- personnel, lobbying and advocacy, knowledge development and shareing. It can also include costs related to program implementation on the ground, such as ment. Moreover, we are audited annually by the International project-related office and travel expenses that are incurred by the Cordaid Organization for Standardization (ISO). During 2013, internal offices abroad. These expenditures are allocated to individual programs in line with MFS regulations on reporting spending. audits of our international activities generated eight reports ** Due to the upgrade of our reporting systems to generate Business Unit data in of suspected frauds, including two at our own field offices in 2013, we cannot offer comparative figures for 2012. *** Includes spending on Poverty in the Netherlands. Congo and the Central African Republic (CAR). The report in Congo is still under investigation. The CAR issue concerned the loss of €686 in cash that could not be traced. Procedures for the safe keeping of cash were changed. Following investigation of other suspected frauds, two partners, one in Congo, the other in Guinea, were blacklisted. The remaining cases are still under investigation.

28 APRIL 2014 © CORDAID Risk management CORDAID 2013 ANNUAL REPORT

RISK MANAGEMENT THE RISKS WE RUN

Like all NGOs, Cordaid is exposed to risk. However, given our Mitigation: All our BUs are tapping into new sources of finance focus on the most dangerous regions of the world – fragile and we have set clear goals for raising funds. During 2013, we states and conflict areas – our project-related risks are were able to increase our institutional funding significantly. arguably even greater than those of our colleagues in the development cooperation world. A risk profile by country Worldwide decrease of available funds for development can be found on our website. We manage and mitigate risks cooperation - European NGOs especially challenged where we have at least some influence. And we take all risks There is a diminishing share of global funds available into account when committing to a program or project. for Cordaid’s focus activities – fragile states. However, the threat or presence of risk does not deter us Mitigation: We are vigorously pursuing diversified and from pursuing our goals of building flourishing communi- decentralized, especially local, funding. Our adoption of ties. As an organization, we also run risk that could impact Theories of Change that prioritize problems and solutions our continuity as we transition to a social enterprise. The for all BUs should help us make well-targeted tenders. overview here shows we are very much aware of those risks. Diminishing funding from private and family donors Our aim is to provide the best possible overview of risk. The Cordaid has grass-roots support of around 324,000 regular risks identified here and their mitigation were identified as the contributors through our five charities, all household names in main risks following a series of workshops involving staff from the Netherlands. However, the traditional patterns of giving all departments and input from Cordaid’s senior management through long-term commitment by the 50+ generation are and Works’ Council. Follow-up discussions fine-tuned our risk changing rapidly. The under-50s are generous but often give on profile. an incidental basis. There is also growing competition for the charity euro. Cordaid has yet to find a way to distinguish itself Financial risk from other Dutch NGOs. There is a risk that people feel less connected to Catholic values. This could result in a diminished Inability to tap into new funding opportunities constituency in the Netherlands and therefore greater pressure The underlying factors in this risk include problems arising to find alternative funding sources. from the transition to a social enterprise and the Business Unit Mitigation: Communication and innovation are essential to (BU) structure. It is also possible that Cordaid will not be able mitigate this risk. Cordaid is already putting in place new and to offer the returns many institutional donors may require. innovative ways of attracting private donors and securing Mitigation: As part of the transition to the new organizational their loyalty. A good example is our Cordaid Memisa’s activity structure, the BUs are now tasked with acquiring their own to raise funds for maternal health from new mothers/parents- funding. They are further tasked with developing propositions to-be and young families. Each Cordaid label is currently and products that will appeal to new (potential) donors, rolling out a more focused campaign and we will be imple- specifically through new partnerships, including international menting a new communication strategy based on social and domestic foundations, organizations and companies. entrepreneurship and focused on fragile states and conflict Cordaid already has experience in this type of partnership. areas. We work with ASN Bank in the Netherlands to raise funds for a number of BUs, including Child & Education (programs Competition from more successful BUs for the services provided in the Central African Republic, Congo and Uganda) and by staff departments Entrepreneurship (women’s microcredit projects in Vietnam). All BUs use the services offered by our staff departments and Close monitoring of income has also been put in place, includ- the cost of that support is passed on to the BU concerned. ing Key Performance Indicators (KPIs) on funds raised. There is a potential for tension between more successful BUs’ and those that have less funding available. Mitigation: Close Diminishing funding from Dutch government funds monitoring of potential tense situations by senior manage- From 2016, the way the Dutch government manages its ment. Effective communication is essential to help prevent development cooperation funding will change. To date, such occurrences. However, the primary method to mitigate is funds were made available to recognized NGOs with access to reduce these costs by streamlining the staff organization to grass-roots support from private and family donors. The and looking at non-personnel expenses. economic crisis is one driver but the shift from aid to trade is also part of the rationale. This will result in increased competition from other NGOs.

APRIL 2014 © CORDAID 29 CORDAID 2013 ANNUAL REPORT Risk management

Competence/cultural risk The current organization lacks the right mix of competences and knowledge to make the transition Tension between the need to change from a ‘donor’ to The ‘donor’ role and social entrepreneurship require different entrepreneurial mindset mindsets. There is a risk that some of the most highly skilled Since the 1970s, Cordaid has been the recipient of government and knowledgeable staff will be unable to make the transition. co-funding. In essence, that means Cordaid often acted as a Cost restraints could prevent Cordaid from hiring new person- ‘donor’. There is a risk that the need to find alternative sources nel with the required skill sets and competences. of funding to ensure continuity from 2016 will lead to tensions Mitigation: Support staff through change programs to in allocating time and resources to managing government stimulate acquisition of new competences, also through a co-funding and raising our own funds. comprehensive training program that began in 2013 and will Mitigation: We have established KPIs for our co-funding continue until 2015. programs and projects so that we ensure these are executed with vigor. The use of co-funding, that we will continue to Implementing partners are unable to deliver on programs/ receive through 2015, will be defined. To prevent any tension, projects the use of co-funding to seed projects is one possible Cordaid is committed to fragile contexts. Although we are mitigation. growing our field presence and thereby our ability to execute programs in difficult and/or dangerous regions, we still Culture not yet aligned to transition to social enterprise depend to a significant extent on local partners to implement The transition has brought numerous changes in staffing at all programs. There is a risk that we will be unable to find partners levels of the organization. At the same time, staff are under with adequate capacity to undertake implementation of pressure to implement the changes essential to making the programs. This could result in damage to our reputation and transition. diminishing effectiveness. Mitigation: Team-building, organizational meetings and KPIs Mitigation: We must innovate and roll-out capacity building help mitigate this risk. It is imperative that this dialog is among partners and accelerate learning for them. Managing maintained to ensure continuity. Workshops and meetings of donor expectations is another way to mitigate this risk. personnel from both the main office in The Hague and people Possible changes to the mix of partners is another potential working in the field have been set up, including an annual approach. Policy Week and a meetings of Finance Staff throughout the organization. For risk profiles and analysis of all the countries where we work, please visit the dedicated sections on our website, www.cordaid.org/en/countries.

30 APRIL 2014 © CORDAID How Cordaid is governed CORDAID 2013 ANNUAL REPORT

HOW CORDAID IS GOVERNED

As one of the Netherlands’ largest NGOs, the vast majority of please see the SB profile on our website. From 2013, SB members Cordaid’s financing comes from either government/institu- are appointed for a maximum of two four-year terms. tional funding or private contributions from the general public. As such, we have a duty of care when it comes to The SB’s composition is also diverse in terms of gender. Four of accountability to our constituents – beneficiaries, partners, the seven members are women (for full biographies of all SB donors and staff. Moreover, good governance is one of the key members, please visit our website: www.cordaid.org/govern- factors in all our community-based projects so it is impera- ance). Every year, the SB evaluates its functioning and also that tive that we ‘practice what we preach’. That is why governance of the Board of Directors (BoD). In early 2014, the Supervisory plays a key role at Cordaid. This is how we are governed. Board carried out a self-evaluation under the guidance of an external expert. The full SB discussed in depth its own func- What is Good Governance tioning, especially how it can be most useful to and supportive Good Governance covers how we are managed, how we are of Cordaid and its BoD at this time of changing internal and supervised, how we work with constituents and how the external circumstances. interests of those constituents are taken into account. Cordaid’s governance is based on a two-tier system, with a Supervisory Supervision in 2013 Board overseeing the Board of Directors. Moreover, we have in The SB comes together at least six times a year at prescheduled place an International Advisory Panel that supports Cordaid’s meetings. Additional meetings can be arranged if needed. strategic development and how we pursue our vision and In 2013, the SB met seven times and various members were in mission. Our governance is described in full in the Articles of close contact throughout much of the year, specifically in light Association and in the Good Governance Code (both can be of the search for and appointment of a new CEO. Attendance at found in Dutch and English on our website: www.cordaid.org/ prescheduled meetings was 82%. The main topics at these governance. Cordaid has also received the Central Bureau of meetings included evaluation and progress on Cordaid’s Fundraising seal of approval that monitors fundraising transition to a social enterprise, the related Good Governance organizations and incorporates the so-called Wijffels Code Code, the upcoming centenary in 2014, funding and relations of Governance for NGOs and charitable organizations – with the Works’ Council. During 2013, the SB initiated a search our current certification is valid through 2015. for a new CEO to succeed Rene Grotenhuis. Former diplomat Simone Filippini (1959) was appointed and joined Cordaid in How we are supervised September 2013. The SB has a dedicated Audit Committee Cordaid’s Supervisory Board (SB) currently comprises seven comprising three of its members with specific financial members. In early 2014, four members, including Frans expertise. The Audit Committee reviews annual and quarterly Slangen who had been Chair from 2001 until 2013, stepped financial and audit statements and performance against down. We are extremely grateful for their dedicated and long annual budgets for discussion with the full SB. The Audit service to Cordaid. Two new members were appointed in 2013 Committee met twice in 2013 according to a prearranged and 2014, including the present Chair, Ernst Hirsch Ballin. All schedule and included one meeting with the external auditors. members have specific experience relevant to our activities,

BOARD MEMBER APPOINTED RETIRING ELIGIBLE FOR AUDIT (INTERNATIONAL) DEVELOPMENT JUSTICE/ WOMEN’S SUSTAINABILITY REAPPOINTMENT COMMITTEE FINANCE/ COOPERATION HEALTHCARE ISSUES (CLIMATE ECONOMICS CHANGE)

Ernst Hirsch Ballin 2013 2021 2017 ✔ ✔ (chairman)

Teresa Fogelberg 2002 2014 - ✔ ✔ ✔

Karien van Gennip 2008 2016 - ✔ ✔

Susana Menendez 2011 2019 2015 ✔ ✔ ✔

Kees Zevenbergen 2011 2019 2015 ✔ ✔ ✔

Michel van de 2011 2019 2015 ✔ ✔ Coevering

Jolanda van Bussel 2014 2022 2018 ✔ ✔ ✔

Frans Slangen 2001 2013 - ✔ ✔

Gert van Maanen 2001 2013 - ✔ ✔ ✔

Arie Oostlander 2005 2013 - ✔ ✔

Jan Bentvelzen S.J. 2007 2013 - ✔ ✔

APRIL 2014 © CORDAID 31 CORDAID 2013 ANNUAL REPORT How Cordaid is governed

Reporting lines from private and family donors in the Netherlands, we offer an The Board of Directors (BoD) is responsible for executing easy to use, online complaints form on the website. In 2013, Cordaid’s strategy in pursuit of our vision and mission. The there were a few hundred complaints, ranging from comments BoD is tasked with providing full information to the SB so on too many fund-raising approaches via social media to that it can carry out its supervisory responsibilities. queries on director salaries (a new CEO was appointed in the Information and reporting flows to the SB are managed by the reporting year) and administrative errors. The number of BoD. The CEO is organizationally responsible for Cordaid’s complaints represents 0.2% of our total individual donor base staff departments and meets regularly with heads of depart- of 324,000. We respond to all complaints quickly as our ment. The COO has the same responsibility for the Business individual donors are very important to ongoing fundraising. Units (BUs). Where relevant, heads of departments or BUs We treat such complaints very seriously and have a policy on present information directly to the SB. how such complaints should be managed. There is a clear process on managing complaints. We set time limits on Remuneration at Cordaid responses: confirmation of receipt within two days; a maxi- Cordaid has in place an executive remuneration policy which mum of four weeks for assessment of the complaint, followed is reviewed and adopted periodically by the SB. The current by response to the complainant. If no satisfactory solution remuneration policy was evaluated most recently in 2011. Our can be found, the issue can be forwarded to the Complaints current policy adheres to and is in line with the recommenda- Committee comprising the CEO, the Q&C Compliance Officer tions of the Association of NGOs and Charitable Organizations and the Manager of the Donor Contact Center. (VFI) and the Wijffels Code. SB members receive no remunera- tion for their contribution to Cordaid. Expenses are paid to Accountability cover the cost of attendance at meetings and travel. In line with our adherence to Central Bureau for Fundraising Remuneration of executive directors (BoD) are fully in line with (CBF) best practice and requirements, we report annually on VFI and Wijffels Code recommendations and are based on a ‘accountability’. In fact, this whole annual report is about our point-based weighting system that sets a maximum for each accountability: what are we doing, where, why, with whom, director. According to policy, remuneration consists of a gross and how are we trying to get the best results and continuously salary, holiday allowance, social security contributions, pension improve our impacts. That is why we think that the following costs expenses and year-end bonus (this latter is received by all quick-reference guide to the three guiding principles of the Cordaid employees). In 2013, total remuneration to executive CBF accountability report will be most useful to readers: directors amounted to €329,232 (2012: €266,811). The difference is ▪▪ Governance: see How Cordaid is governed, pages 31-33. due to the appointment of a new CEO during 2013 whose tenure ▪▪ Effectiveness of our programs: seeCordaid at work, pages 14-25 overlapped with the departing CEO during hand-over. Mr ▪▪ Stakeholders and our communication with them: Grotenhuis resigned as CEO of Cordaid in October 2013 and throughout the report, but especially see pages 7, 9, 11-13, received no separation payment of any kind other than payment including the completely new and open way of of salary and benefits until 31 January 2014. Full details can be communicating on everything we do through ‘open data’. found in the Annual Financial Statements. Corporate Social Responsibility Codes of Conduct & Quality Standards We have committed to the Global Reporting Initiative (GRI), Our staff adheres to a number of Codes of Conduct (please see the leading organization for reporting on sustainability. The www.cordaid.org/codesofconduct) that set clear guidelines for idea behind GRI is to help organizations chart their sustaina- how we behave and interact with other constituents and our bility efforts. In this annual report, we have taken the first working environment. In July 2013, we published our revised steps towards integrating version 4 requirements into overall Code of Conduct that is applicable to everyone who works at reporting. Many on the standard disclosures in GRI4 are Cordaid. Moreover, we also have in place policies and codes covered here. However, there is more to be done on all aspects on anti-corruption and sexual abuse. In terms of our social of our Corporate Social Responsibility (CSR). In a 2012 bench- responsibility, Cordaid has a CSR policy and carries out an mark survey by KPMG, Cordaid’s CSR was assessed as the most ISO 26000 self-assessment every year. transparent of all NGOs in the Netherlands – this is obviously a position we intend to retain and build on. All our projects Complaints procedures strive for both positive and integral governance and sustaina- Although the vast majority of Cordaid’s projects are executed bility-related outcomes and impacts. We are currently working as planned, we do sometimes receive complaints from to find ways of integrating our impacts around the world into constituents. These can refer to dissatisfaction on non-com- our GRI reporting. We have made a good start with our pliance with procedural agreements/contracts or not meeting best-in-class IATI open data reporting on the outcomes and expectations on service delivery to a constituent. For example impacts of our projects. However, we are not yet able to distil in 2013, we received a complaint from another international what we consider meaningful summaries – this will require organization in the South Sudan. We had hired one of the more work on our systems. Our own footprint in The Hague is organization’s expat employees who is originally from Kenya. monitored continually and results can be viewed here and on This organization complained because it had incurred the www.cordaid.org/CSR. With the ongoing roll-out of our relocation and training costs of bringing this employee to upgraded reporting systems to the international offices, we South Sudan. In consultation with them, we settled the issue aim to incorporate their footprint in the future. Cordaid also by agreeing that future recruitment would be pursued makes investments to safeguard its continuity. All invest- sensibly and avoid getting in each other’s way. For complaints ments must meet strict sustainability criteria and are limited

32 APRIL 2014 © CORDAID How Cordaid is governed CORDAID 2013 ANNUAL REPORT

EMISSIONS PER ACTIVITY International Advisory Board (IAB) From 2009, Cordaid’s strategic development has been 1.8% supported by an International Advisory Board. This Board 2.6% consists of up to 10 members who are appointed for three- 0.2% 5.3% year terms and reflect diversity in regional affiliation, 5.1% expertise, gender, age, ethnicity and background 0.4% (see www.cordaid.org/internationaladvisoryboard). In 2013, five members stepped down at the end of their terms and we are in the process of appointing new members to take their places. The IAB’s scope is to advise the Board of Directors on strategic direction and the implications for Paper Cordaid and its constituents. The IAB receives no monetary Vehicles reward for its contribution to Cordaid. Members only Electricity receive travel expenses so that they can attend the maxi- Heating mum of two meetings convened every year. Topics and Public Transport background information are provided well ahead of the Water meetings. Advice is formulated at the end of each meeting 84.7% Air travel and is discussed with Cordaid’s Supervisory Board. It is then published on our intranet so that staff has full access to it. In 2013, the IAB met once. It provided advice on a number of EMISSIONS highly relevant topics in our transition to a social enter- prise. These included the Theory of Change concept that is 3,000 helping us to prioritize our programs in fragile states and

conflict areas in 2014. Innovation was seen a key added 2,500 value Cordaid can bring to its ongoing transition and we are advised to embed this into the overall and Business Unit 2,000 theories of change – see also our section on strategy. e 2

1,500

to those businesses that meet our requirements on personnel, CO Ton the environment and human rights. Asset management 1,000 principles have been formalized in a Treasury Statute that can be reviewed on our website. The investment portfolio is screened throughout the year by an independent sustainability 500 analyst. Our Investments Business Unit is a signatory to the UN Principles for Responsible Investments. 0 2011 2012 2013

Cordaid’s footprint Paper Vehicles Electricity Heating At present, Cordaid monitors the use of resources by our Water Air travel Public Transport headquarters in The Hague very carefully and we have been doing this for some years. Every year, we submit data to the EMISSIONS AND COMPENSATION independent Climate Neutral Group for processing into an annual report on our footprint. Cordaid tries to further reduce 3,000 its emissions every year, but where this proves unfeasible compensates those CO2 emissions by purchasing carbon credits. The Climate Neutral Group’s management of carbon 2,500 credits is monitored annually by Pricewaterhouse-Coopers. Although in 2013, our emissions were higher than in 2011, 2,000 we have been able to reduce our footprint compared to 2012. e 2

However, due to the nature of our work, air travel continues to 1,500 represent the lion’s share of our usage. In the course of 2014 we Ton CO Ton will introduce monitoring in our 11 country offices around the world. The expectation is that we should be able to include 1,000 all emissions by 2015. It will take more time to incorporate impacts further up the value chain but it remains an aspira- 500 tion for Cordaid.

0 2011 2012 2013

Emissions Compensation

APRIL 2014 © CORDAID 33 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

CORDAID’S 2013 FINANCIAL STATEMENTS

CONTENTS annual accounts 2013...... 35 Introduction ...... 35 Balance sheet as of 31 December 2013...... 36 Statement of income and expenditure 2013 ...... 36 Cash flow statement 2013...... 40 notes to the balance sheet and statement of income and expenditure...... 41 other information...... 68 Subsequent events ...... 68 independent auditors opinion...... 69

34 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

ANNUAL ACCOUNTS 2013

Introduction Management and Administration costs, although substantially The annual accounts are an integrated part of Cordaid’s annual lower than last year, showed an overrun of €0.8m against report. While the previous section of the annual report are budget, due mainly due to the conclusion of the transition about Cordaid’s activities and results in 2013, these annual project at the beginning of the year. ‘Investment income’ is accounts present Cordaid’s financial accountability. relatively low at only €0.8m due to the fact that income on bonds and cash of €2.2m is partly offset by unrealized currency In last year’s accounts we already touched upon the changes losses. Cordaid is undergoing as it transitions to a new business model, with highly self-supporting and entrepreneurial Ratios: Business Units searching for new ways of resource mobiliza- Spending ratios are well over 90% and higher than budgeted. tion. The year 2013 shows the first results: a sharp increase in Organizational costs (program management) is lower than institutional donor funding (see also section 16), due in part to budget at 8.1% as a consequence of the higher program costs. highly successful tendering (35% success rate). A substantial Cost of own fund raising is on budget at 21.2%, well within the part of these additional funds was raised and spent by the CBF limit of 25%. Costs of M&A are on budget at 2.2%. Healthcare Business Unit. The Statement of Income and Expenditure shows a positive The Balance Sheet shows relatively stable figures and healthy bottom-line result of €4.2m. This is mainly due to €5.8m reserves. The continuity reserve has been increased; although income from the SHO-Philippines action of which only €1.0m expectations on new funding sources are positive, this reserve was spent in 2013; this leaves €4.8m for program expenditures is intended to protect us from the worst. in the years to come. Furthermore, the costs of fundraising and increasing awareness were €0.5m lower than planned. In contrast, we have been obliged to take a provision of €1.4 The Hague, 23 April 2014 million for potentially non-eligible expenses on donor projects.

APRIL 2014 © CORDAID 35 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

BALANCE SHEET AS OF 31 DECEMBER 2013 (after proposed appropriation of funds)

X € 1,000 NOTE 31/DEC/2013 31/DEC/2012

Assets Fixed assets Tangible assets 4 899 942

Financial fixed assets - Issued in connection with the objectives 5 40,905 42,703 - Investments 6 37,794 37,148 78,699 79,851

Current assets Stocks for emergency aid 7 353 0

Receivables 8 - Subsidies governments / organisations 25,607 30,904 - Receivable from inheritances 7,144 9,764 - Other receivables 3,475 1,469 - Interest receivable 1,404 1,550 37,630 43,687

Cash and Bank 9 73,273 72,378

Total assets 190,854 196,858

X € 1,000 NOTE 31/DEC/2013 31/DEC/2012

Liabilities Reserves 10 - Continuity reserve 12,275 9,944 - Tangible fixed assets reserves 899 942 - Earmarked reserves 10,733 0 23,907 10,886 Funds 10 - Restricted funds 6,775 1,623 - Semi-restricted funds 9,028 26,329 - Loans & guarantees fund 83,996 80,625 99,799 108,577

Provisions 11 1,776 1,397

Non-current liabilities 12 - Project commitments 3,091 2,864

Current liabilities 12 - Project commitments 43,236 48,759 - Other current liabilities 19,045 24,375 62,281 73,134

Total Liabilities 190,854 196,858

36 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

STATEMENT OF INCOME AND EXPENDITURE 2013

X € 1,000 NOTE 2013 BUDGETTED 2013 2012

Income - Own fundraising 14 28,330 30,622 30,388 - Third party campaigns 15 16,324 16,198 9,847 - Government grants 16 130,744 92,478 82,391 - Gains on financial assets 17 4,144 1,725 3,966 - Investment income 18 849 560 2,753 - Other income 19 663 0 0 Total incoming resources 181,054 141,583 129,345

Resources expended Spent on objectives - Program costs: 20 - Conflict transformation / Urban Matters 24,342 22,016 25,219 Security & justice 9,125 7,512 Urban matters 1,732 2,912 Extractives 4,187 4,736 Women’s leadership 9,298 6,856 - Disaster Risk Reduction / Emergency aid 23,644 27,754 19,495 Disaster response 23,644 27,754 - Health & Wellbeing 81,811 41,716 32,710 Health care 74,992 33,800 Child & education 6,819 7,916 - Entrepreneuship 18,071 23,615 14,568 Entrepreneurship 1,529 6,582 Food Security 8,667 7,400 Investments 7,875 4,817 - Domestic 12,988 10,811 13,364 Cordaid Netherlands 12,988 10,811 13,364 - Public information / awareness campaigns 5,572 5,765 6,260 - Other expenditure 0 0 335 166,428 126,861 111,951

Cost of generating funds - Cost of own fundraising activities 21 6,002 6,502 6,707 - Cost of securing government grants 21 435 496 490 - Investment Costs 21 51 49 43 6,488 7,047 7,240

Management and administration Management and administration cost 21 3,895 3,093 4,676

Total resources expended 176,811 137,001 123,867

Balance of funds 4,243 4,582 5,478

TBD: Reuse of resources from loans and guarantees fund 1,908 233 1,473

APRIL 2014 © CORDAID 37 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

APPROPRIATION OF THE FUNDS

X € 1,000 2013 2012

The balance of funds was appropriated as follows:

Reserves

- continuity reserve 2,331 -1,265

- tangible fixed assets reserve -43 -456

- earmarked reserves 10,733 0

13,021 -1,721

Funds

- restricted funds 5,152 1,553

- semi-restricted funds -17,301 1,539

- loans & guarantees fund 3,371 4,107

-8,778 7,199

Income from operating activities 4,243 5,478

- transfer of funds to Bisschoppelijke Vastenaktie NL 0 -1,600

4,243 3,878

38 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

PERFORMANCE INDICATORS

In 2013 the following performance indicators were derived from the statement of income and expenditure:

PERFORMANCE INDICATORS 2013 BUDGETTED 2012

- Income-to-spending ratio (% charitable activities vs. total incoming resources) 91.9% 89.6% 86.6%

- Program-to-spending ratio (% charitable activities vs. total resources expended) 94.1% 92.6% 90.4%

- Program management cost ratio (% vs. total program costs) 8.1% 9.3% 12.0%

- Fundraising ratio (% cost of generating funds vs. total incoming resources) 3.6% 5.0% 5.6%

- Dependency on MFS II grant (% MFSII vs. total income) 39.5% 50.2% 51.6%

- Own fundraising ratio (% cost of own fundraising activities vs. own fundraising) 21.2% 21.2% 22.1%

- Management and administration ratio (% vs. total resources expended) 2.2% 2.3% 3.8%

▪▪ Income-to-spending ratio: 92.5%. This is higher than the ▪▪ Fundraising ratio: 3.6% (budget: 5.0%). The improvement of figure for 2012 (86.6%) and the budgeted ratio of 89.6%. The the ratio is mainly caused by the higher income from main factor affecting this ratio is the excess of €39.8 million government grants. Income from government grants was on the budget (2012: € 55.2 million) for projects funded by more than 40% above budget. back donors. ▪▪ Own fundraising ratio: 21.2% (budget: 21.2%). The ratio is on ▪▪ Program-to-spending ratio: 94.1% (budget: 92.6%). The budget as the decline in fundraising cost of 7% is at the same higher than budget ratio is due to fundraising costs under level as the 7% decline on own fundraising income. The budget by 0.6 million and due to the excess expenditure on fundraising income decreased through a lower receivable on spending on objectives. Compared to 2012, the ratio is higher legacies whilst the donations and gifts were above budget. due to higher fundraising costs and lower expenditure on ▪▪ Dependency on MFS II grant: 39.5% (budget: 50.2%). The objectives. share of MFS II income in the total income of Cordaid is ▪▪ Program management costs ratio: 8.1% (budget: 9.3%). In below budget due to the higher income from other line with the Dutch Accounting Standard for Fundraising government grants. This indicates that Cordaid is successful Institutions (650), these costs come under the category of in its strategy of diversifying its sources of income. spent on objectives. Given the relative importance of these ▪▪ Management and administration ratio: 2.2% is below the costs in Cordaid’s total resources expended, Cordaid insists target ratio of 2.3% due to lower overhead costs and higher on maintaining this ratio as an efficiency indicator. The relief expenditures in 2013. The difference between 2013 and program management costs ratio in 2013 was at the same 2012 ratios is that last year we took reorganization costs and level as in 2012. The deviation from budget is explained by had lower objectives spending. higher than budgeted total program costs whilst program management cost remained roughly at the same level.

APRIL 2014 © CORDAID 39 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

CASH FLOW STATEMENT 2013

X € 1,000 NOTE 2013 2012

Cash flows from operating activities

Incoming resources 14-19 181,054 129,345

Resources expended 20-21 176,811 123,867

4,243 5,478

Adjustments for:

- depreciation fixed assets 4 576 588

- changes in provisions 11 379 1,277

955 1,865

Changes in working capital:

- Stocks for emergency aid 7 -353 0

- Receivables 8 6,057 25,350

- Financial fixed assets (connected to the objectives) 5 1,798 -8,634

- Project commitments 12 -5,296 -33,332

- Investments 6 -646 -206

- Other current liabilities 12 -5,330 13,575

-3,770 -3,247

Cash flows from operating activities 1,428 4,096

Cash flows from investing activities

- Purchases of tangible assets 4 -533 -132

- Separation of Bisschoppelijke Vastenaktie 0 -1,600

Cash flows from investing activities -533 -1,732

Cash flows from financing activities

Receipts / repayments of long-term borrowings 0 0

Cash flows from financing activities 0 0

Net increase/decrease in cash 895 2,364

The movement of the cash and cash equivalents is as following:

X € 1,000 2013 2012

Balance at 01 January 2013 72,378 70,014

Changes 895 2,364

Balance at 31 december 2013 73,273 72,378

40 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

NOTES TO THE BALANCE SHEET AND STATEMENT OF INCOME AND EXPENDITURE

1 . GENERAL NOTES Committee. The Supervisory Board also adopts the strategic policy plan drafted by the Board, and approves the Annual Plan. 1 1. Activities Rooted in its Christian tradition, Cordaid seeks to bring about The board members are: a sustainable society and offer humanitarian aid through ▪▪ S. Filippini, CEO (from 16 September 2013) professional and efficient international development coopera- ▪▪ R.B.M. Grotenhuis, CEO (until 15 October 2013) tion. Cordaid focuses on sustainable development relationships ▪▪ H.L. van Eeghen, COO with partner organizations globally, regardless of their faith, origin or political convictions. From this point of departure, During 2013, the Supervisory Board members were: Cordaid works in the fields of education, the provision of public ▪▪ E.M.H. Hirsch Ballin, Chair information, lobbying and fundraising in Europe. Cordaid is ▪▪ G.H.O. van Maanen, member Audit Committee open to cooperation with like-minded organizations. (until 15 December 2013), ▪▪ J. van Bussel, member audit Audit Committee The object of Cordaid, a foundation, under its Articles of (from 16 December 2013) Association reads as follows (translated): ▪▪ T.C. Fogelberg ‘… to undertake activities in accordance with evangelical principles and ▪▪ C.E.G. van Gennip inspired from the Catholic community in the Netherlands, focusing on: ▪▪ M.S. Menéndez a. providing emergency aid and refugee relief; ▪▪ L.C. Zevenbergen, member Audit Committee b. providing aid to special target groups, such as the elderly, ▪▪ M. van de Coevering, member Audit Committee the disabled and children; c. providing medical aid; and 1.2 Notes to the cash flow statement d. all aspects related to structural poverty relief of under­privileged groups, The cash flow statement is prepared using the indirect method. particularly in developing countries, The funds in the cash flow statement comprise cash and cash and in Central and Eastern Europe.’ equivalents. Cash flows in foreign currencies are translated at an estimated average rate. Exchange differences affecting cash The consolidated annual accounts comprise the figures of the items, interest paid and interest received are included in cash following foundations: from operating activities. ▪▪ Stichting Cordaid (The Hague) ▪▪ Stichting Cordaid Logistics (Rotterdam) Cash flows from operating activities The gross cash flow from operating activities was driven by the The objectives and Board of Stichting Cordaid Logistics are €4.2m surplus for the reporting year. Depreciation was in line the same as those of Stichting Cordaid. with 2012.

The street address of both foundations is as follows: Other factors were changes in the: Lutherse Burgwal 10 ▪▪ redundancy provisions of 2012 as a result of payments to 2512 CB The Hague surplus staff; The Netherlands ▪▪ emergency stocks for relief aid in Uganda caused a negative cash flow of €0.4m; The Board of Cordaid bears ultimate responsibility for the ▪▪ receivables had a positive cash flow due to lower outstanding general course of affairs at Stichting Cordaid. Together with receivables to governments of €5.3m and due to a lower the Supervisory Board, the Board is responsible for Cordaid’s receivable from legacies of €2.6m. A higher receivable on corporate governance structure and compliance with good Vastenaktie of €2.2m had an opposite effect. governance rules. The composition of the Supervisory Board ▪▪ portfolio investments decreased by a total €1.8m due to a is such that its members are able to act critically and inde- change in the composition of the investment portfolio. The pendently of one another, the Board and any particular investment portfolio had a higher increase in participations interests. The Supervisory Board is responsible for supervising than the decrease in loans & guarantees. the Board and the general course of affairs at Cordaid. ▪▪ project commitments generated a negative cash flow due to higher payments on projects compared to 2012. The higher The Board is in charge of managing the foundation, including payments are explained by the increase in total program costs. running its day-to-day business and implementing its pro- ▪▪ investments created a negative cash flow due to purchases of grams and activities. The budget, the Annual Report and the bonds. annual accounts that are prepared by the Board are subject to ▪▪ payables chiefly relate to a €2.7m decrease in creditors and adoption by the Supervisory Board after advice from the Audit €2.8m decrease in deferred government grants.

APRIL 2014 © CORDAID 41 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

Cash flows from investing activities 2 . ACCOUNTING PRINCIPLES Purchases of tangible assets came at €0.5m in 2013, due mainly to the planned introduction of a new financial system and 2 1. General refurbishment of the office building. The financial statements have been prepared in accordance with the Dutch Accounting Standard for Fundraising Cash flows from financing activities Institutions (RJ 650). The financial statements are prepared Cordaid has no non-current liabilities for financing its opera- in euros. Balances and results in 2013 are compared with the tions. The non-current liabilities on the balance sheet relate to budget as approved by the Supervisory Board and 2012 results long-term project financing, which are recognized within cash and balances. Assets and liabilities are generally valued at flows from operating activities. acquisition cost, production cost or at current value. If no specific valuation method is indicated, the valuation is done 1 .3 Changes in accounting estimates at the acquisition price. References are included in the balance Cordaid changed the accounting estimate for determining sheet and statement of income and expenses. which funds are earmarked for which objective by third parties in 2013. Cordaid receives interest on cash and income from 2 .2 Comparison with previous year temporary investments financed with cash. Said cash is The accounting principles used for valuation and recognition of classified as semi-restricted. In prior years, the management income and expenditure are unchanged from the previous year. of Cordaid considered the interest received on cash surpluses during the year and income from investments as part of 2 .3 Foreign currency semi-restricted funds. Income was therefore allocated to the semi-restricted funds based on predefined allocation keys. Functional currency Cordaid has the moral obligation to spend these resources on The financial statements are presented in euros, which is the the objectives of Cordaid. However, finding an objective basis functional and presentation currency of Cordaid. for allocation of these resources to the semi-restricted funds became very complex, given the fact that interest on interest Transactions, receivables and payables was included in the income and income from investments Transactions in foreign currencies during the period are financed with interest income. Cordaid decided to classify the included in the financial statements at the exchange rate on full income as earmarked reserves instead of allocating the the transaction date. Monetary assets and liabilities denomi- income to the different semi-restricted funds based on estima- nated in foreign currencies are translated into the functional tion of the income’s source. As a consequence of this changed currency at the closing rate. The exchange differences arising estimation, the cumulative income from investments and from the settlement and translation are credited or charged to interest per 31 December 2013 is classified as an earmarked the statement of income and expenses. reserve in 2013 instead of a semi-restricted fund. The amount involved is €10.7m. 2.4 Tangible fixed assets All tangible fixed assets are valued at cost less depreciation 1 .4 Estimates based on the estimated useful life. Grants are deducted from In applying accounting policies and standards for preparing the acquisition or manufacturing cost of the assets to which annual accounts, the Board of Cordaid is required to make they relate. estimates and judgments that might significantly influence the amounts disclosed in the annual accounts. If necessary for 2.5 Financial fixed assets the purposes of providing the view required under Section 362(1), Book 2 of the Netherlands Civil Code, the nature of these Loans, guarantees and participations estimates and judgments, including the related assumptions, Loans and guarantees are stated at face value, net of an are disclosed in the notes to the relevant items. allowance for doubtful debts, which is recognized directly in the statement of income and expenditure. Participations are valued at cost taking into account possible impairments at reporting date. These participations do not involve a structural commitment for the purposes of Cordaid’s own operations.

Bonds Bonds are stated at fair market value. Any changes in value and transaction costs are recognized through income or expenditure. Transaction costs are charged directly to the statement of income and expenditure.

42 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

2 6. Non-current asset impairment 2 12. Liabilities Cordaid assesses at each reporting date whether there is any evidence of assets being subject to impairment. If any such General evidence exists, the recoverable amount of the relevant asset is Liabilities are initially recognized at fair value. Transaction determined. An asset is subject to impairment if its carrying costs directly attributable to the incurrence of the liabilities are amount is higher than its recoverable amount; the recoverable included in the measurement on initial recognition. Liabilities amount is the higher of net realizable value and value in use. are subsequently measured at amortized cost; this is the If it is established that a previously recognized impairment amount received plus or less any premium or discount and net loss no longer applies or has declined, the increased carrying of transaction costs. amount of the asset in question is not set higher than the carrying amount that would have been determined had no Operational lease impairment loss been recognized. Liabilities under operating leases (such as the lease of premises) are accounted for in the statement of income and expenditure 2 7. Stocks equally over the term of the contract, taking into account Stocks are valued at cost using the first in, first out method reimbursements received from the lessor. (FIFO). At the moment stocks are assigned to a project the related costs are recognized in the statement of income and Project commitments expenditure as program costs. In case of obsolescence of stock Project commitments are recognized as soon as a contract is costs are recognized as program management costs. issued; they are stated at the fair value stated in the contract, net of any payments. 2 .8 Receivables Receivables are initially recognized at the fair value and subsequently carried at amortised cost. . Allowances for doubtful debts are deducted from the carrying amount of receivable.

2 .9 Cash and cash equivalents Cash and cash equivalents comprise cash and bank balances, and demand deposits falling due in less than 12 months. Cash and cash equivalents are stated at face value.

2 10. Reserves en funds The equity of Cordaid is divided into the following reserves and funds: ▪▪ The continuity reserve is created to ensure that Cordaid can meet its legal and moral obligations in case of a significant fall in income in the future. ▪▪ The tangible fixed assets reserve is created to reserve capital to finance necessary tangible fixed assets in the future. ▪▪ Earmarked reserves are earmarked for future spending on the objectives of Cordaid. The Board of Directors decides on the actual purposes of the reserves, based on internally agreed criteria. ▪▪ The restricted funds are earmarked for a specific project as agreed with third-party donors. ▪▪ Semi-restricted funds are earmarked for activities related to a certain topic, but not limited to specific projects. ▪▪ Restricted Fund loans and guarantees have been committed for program loans and guarantees.

2 11. Provisions Provisions are recognised for legally enforceable or constructive obligations existing at the balance sheet date, the settlement of which is probable to require an outflow of resources whose extent can be reliably estimated. Provisions are measured on the basis of the best estimate of the amounts required to settle the obligations at the balance sheet date. Unless indicated otherwise, provisions are stated at the present value of the expenditure expected to be required to settle the obligations.

APRIL 2014 © CORDAID 43 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

3 . ACCOUNTING PRINCIPLES FOR Gifts in kind THE STATEMENT OF INCOME Gifts in kind are stated at their fair market value in the Netherlands. Where items involving gifts in kind are sent AND EXPENDITURE directly to emergency areas, their value is recognized as a gift and as an expended resource. Cordaid accounts for gifts in kind 3 1. General if the discount/gift has a connection with the nature of Cordaid’s Income and expenses are recognized in the statement of income activities and objectives and Cordaid would have purchased the and expenditure in the year to which they relate. The allocation services or goods if the gift/discount had not been received. is made consistently with previous years. The balance of funds is defined as the difference between income and expenses. 3 .3 Exchange rate differences Income is accounted for in the year it was realized and losses Transactions denominated in foreign currencies conducted can be accounted for as soon as they are identified. during the reporting period are recognized in the annual accounts at the rate of exchange on the transaction date. 3 .2 Income recognition Monetary assets and liabilities denominated in foreign curren- cies are translated into the functional currency at the rate of Income from own fundraising exchange at the reporting date. Any resulting exchange differ- Income from own fundraising involves donations, gifts and ences are recognized through income or expenditure. Non- donations, mailings, Collects, legacies and the sale of materials. monetary assets and liabilities stated at cost and denominated Income from donations, gifts and donations, mailings and in foreign currencies are translated at the rate of exchange at sales of materials are accounted for in the year in which they the transaction date (or the approximate rate of exchange). are received/in which the materials are sold. Exceptions are written undertakings that have been received before year-end 3.4 Amortizations on tangible fixed assets as these can be accounted for in the current year. Tangible assets are carried at cost less straight-line deprecia- tion over their estimated useful lives. Tangible assets are Legacies are recognized based on a statement received from the depreciated from the time they are taken into use over their executor in the year in which the amount can be determined estimated useful lives. If the estimate of future useful life reliably. The valuation of legacies with property is done based changes future depreciation is adjusted. Gains and losses on on the most recent correspondence and receipts are included up the sale of tangible fixed assets are included in depreciation. to the preparation of financial statements. The valuation is done prudently. 3.5 Employee benefits

Income from third-party campaigns Short-term employee benefits Income from third-parties is accounted as such when Cordaid Salaries, wages and social security contributions are recog- carries no risk in the fundraising campaign. The income from nized in the statement of income and expenditure based on third-parties is recognized in the year in which the income is the pay and benefits package to the extent that they are payable received or pledged. to employees.

Income from government grants Pensions Grants and subsidies are recognised in the statement of income Cordaid’s pension plan is administered by Pension fund Zorg and expenditure in the year in which the subsidized costs were en Welzijn, a pension fund for the health and welfare sector. incurred. The grants are recognised where it is probable that Employees’ retirement and partner pensions are based on their they will be received and Cordaid will comply with all attached pensionable salary for full-time employment, net of the state conditions. pension offset. The pension fund endeavors to index-link any accrued pension entitlements and pensions in payment based Interest income and income from investments on general salary trends in the collective bargaining agree- The line item interest income and income from investments ments that govern its affiliated employers in a particular year. contains the (gross) interest, dividends and realized and The pension fund decides every year whether index-linking unrealized exchange income. Interest income and expense would be appropriate and, if so, what index to use given the are recognized time proportionally. financial situation and expected developments in that situa- tion. In doing so, the pension fund uses nominal and realistic Interest income is recognized as investment income (exclusive coverage ratios as benchmarks. Although the pension fund may of interest received on loans and guarantees issued in the decide to apply catch-up index linking, such a decision will not context of the Loans & Guarantees Program, which is recog- have a retroactive effect and will not trigger subsequent nized entirely as gains on financial assets issued in connection payments. Index-linking is funded partially from contributions with the objectives). and partially from return on plan assets. The coverage ratio stood at 109% in November 2013. Result of loans, guarantees and participations Contributions are recognized as employee benefits expense as The interest income is accounted for as investment income soon as they are payable. Prepaid contributions are recognized (excluding interest received on loans and guarantees under the within prepayments and accrued income if they entail a refund Loan and Guarantee Program, which is recognized entirely in the or a reduction in future payments. Contributions payable are result on financial assets available for the objectives of Cordaid). disclosed as liabilities in the balance sheet.

44 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

4 . TANGIBLE FIXED ASSETS

Movements of the tangible fixed assets are as follows:

X € 1,000 BUILDINGS IT EQUIPMENT FURNITURE VEHICLES OTHER ASSETS TOTAL AND FITTINGS

Balance at 1 January 2013

Cost 1,502 3,939 1,330 28 331 7,130

Accumulated depreciation -1,320 3,207- -1,320 -10 -331 -6,188

Carrying value at 1 January 2013 182 732 10 18 0 942

Changes

Purchases 86 366 81 0 0 533

Disposals 0 -217 -34 0 -48 -299

Depreciation -32 -525 -13 -6 0 -576

Depreciation on disposals 0 217 34 0 48 299

Total changes 54 -159 68 -6 0 -43

Balance at 31 December 2013

Cost 1,588 4,088 1,377 28 283 7,364

Accumulated depreciation -1,352 -3,515 -1,299 -16 -283 -6,465

Carrying value at 31 december 2013 236 573 78 12 0 899

Depreciation percentages 10% 33% 20% 33% 33%

The value of tangible fixed assets has remained constant as investments and depreciation almost balance each other. The total investments in 2013 amounted to €533,000. The investments were: the improvement of the lunch room for €86,000, the purchase of 10 laptops for the flex-pool for €6,000, the purchase of a server for flex-work for €30,000, the purchase of a management information system for the Investments Business Unit for €187,000, the purchase of new equipment for the kitchen for €13,000, the replacement and purchase of a new coffee machine of €68,000, and the cost of a new Dynamics AX accounting package for €143,000.

APRIL 2014 © CORDAID 45 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

5 . FINANCIAL FIXED ASSETS ISSUED IN CONNECTION WITH THE OBJECTIVES

Outstanding loans, participations and guarantees are recognized as financial assets issued in connection with the objectives. This relates to loans issued to, and a number of participations in partner organizations for the purposes of funding usually small-scale economic activities (e.g. through microfinance institutions), for which partner organizations find it difficult or impossible to secure finance from commercial banks. Interest rates on these loans are determined by country and by customer.

Movements in financial assets were as follows in 2013:

X € 1,000 LOANS GUARANTEES PARTICIPATIONS TOTAL

Value of portfolio at 1 January 2013 24,667 1,209 20,957 46,833

Provision at 1 January 2013 -3,907 -223 0 -4,130

Carrying amount 1 January 2013 20,760 986 20,957 42,703

Changes

Loans and guarantees issued 5,188 1,068 - 6,256

Loans and guarantees repaid 5,662- 819- - -6,481

Participations acquired/committed - - 2,675 2,675

Participations sold/commitments withdrawn - - -50 -50

Impaired loans and guarantees 1,422- 175- - -1,597

Revaluation of participations - - -1,032 -1,032

Currency gains and losses 1,831- 48- -571 -2,450

Allocated to/withdrawn from provision for loans and guarantees 707 175 - 882

Value of portfolio at 31 December 2013 20,940 1,235 21,978 44,153

Provision at 31 December 2013 -3,200 -48 - -3,248

Carrying amount 31 December 2013 17,740 1,187 21,978 40,905

The financial assets issued in connection with the objectives decreased €1.9m during the year to €40.9m at year-end. Cordaid issued €6.2m in loans and guarantees in 2013, spent €2.7m on participations and received €6.5m in repayments. In addition, impairments, revaluations and currency gains and losses resulted in an adjustment of the portfolio by €4.2m.

X € 1,000 LOANS GUARANTEES TOTAL

< 1 year 3,989 49 4,038

1-5 years 823 0 823

> 5 year 16,128 1,186 17,314

20,940 1,235 22,175

46 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

Cordaid takes a prudent approach for the valuation of its participations. They are carried at cost or at fair value if significantly lower. Participations that have appreciated in value are measured at cost. Cordaid does not, in principle, have any foreign currency exposures. The policy is to sell foreign currencies upon receipt. Payments in foreign currencies are recorded at the current rate. At the end of 2013 there was no currency hedging. Of Cordaid’s loans, an amount of about €6.8m has been subordinated.

List of participations (in €000):

NAME OF CITY COUNTRY PARTICI- OPENING PURCHASED / CURRENCY REVA- SOLD CLOSING ACTIVITIES ORGANISATION PATION BALANCE COMMITTED GAINS AND LUATION BALANCE 2013 LOSSES 2013

Progression Nairobi Kenya 11.3% 0 3,371 - - - 3,371 Investment fund Capital Africa in MFIs LTD

Dia Vikas Gurgaon India 0.0% 2,500 - - - - 2,500 Investment fund in MFIs India

Dia Vikas Gurgaon India 7.9% 1,912 - -282 -368 - 1,261 Investment fund in MFIs India

Rural Fund Utrecht Netherlands 20.0% 2,572 - -103 -15 - 2,454 Small producer fund

Aavishkaar Mumbai India 17.5% 1,650 -215 225 - - 1,660 SME Fund India

WMF Accra Ghana 22.0% 1,587 - 63 - - 1,650 Investment fund in MFIs Ghana

PEF Manila Philippines 0.0% 0 1,513 -13 - - 1,500 Investment fund Asia

PEF Manila Philippines 0.0% 1,463 - -157 - - 1,306 Investment fund Asia

Pymecapital Managua Nicaragua 62.4% 1,513 - -160 33 - 1,386 Investment fund in SMEs Latin America

SME Impact Amsterdam Netherlands 25.0% 1,000 - - 30 - 1,030 Investment fund Fund SME Africa

Stromme Kampala Uganda 19.4% 775 - 225 - - 1,000 Investment fund Microfinance in MFIs Africa East Africa Ltd.

InReturn B.V. Rotterdam Netherlands 21.6% 1,000 - - -275 - 725 Investment fund SME Africa

Peak II Moshi Tanzania 21.0% 747 - -10 -15 - 722 Investment fund SME Africa

Peak I Moshi Tanzania 0.0% 110 - - - - 110 Investment Fund SME Asia

Hivos Triodos Zeist Netherlands 0.0% 1,448 - -353 -436 - 658 Loan related to Fonds investment in Asia

Oikocredit Amersfoort Netherlands 0.4% 317 6 - - - 323 Investment social investor

SIDI Parijs France 1.2% 238 - - - -50 188 Investment company (donor)

Liberation Londen United 19.9% 0 - - 134 - 134 Nut producer Kingdom association

Afrinut Lilongwe Malawi 22.5% 125 - -6 -119 - 0 Investment fund in nut processor

Kuyichi BV Haarlem Netherlands - 0 0 - - - 0 SME

Social Equity Den Haag Netherlands 0.0% 2,000 -2,000 - - - 0 Investment fund Foundation in MFIs

Finance South Juba South Sudan 57.2% 0 - - - - 0 MFI Sudan

20,957 2,675 -571 -1,032 -50 21,978

APRIL 2014 © CORDAID 47 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

Other types of investments carrying the same risk as actual ▪▪ InReturn, an investment fund in SMEs in Africa: in 2013, participations are included in the list of participations. For these the fund’s losses increased. As one of the social investors investments the percentage of the participation is stated as 0.0%. and founders of the fund, Cordaid has provided a first loss guarantee covering potential losses. In addition to the In 2013, the number of participations increased to 22 and the provision of €1m taken in 2011 and 2012, an extra provision total value of the portfolio of participations increased from of €276,000 has been taken to reflect the current risk related €21.0m in 2012 to €22.0m at reporting year-end. Cordaid has to our position as first-loss investor. invested in a participation in start-up funds for an equivalent ▪▪ Liberation, a nut producer headquartered in London: the of €3.4m. This concerns a USD4.5m equity investment in the investment was fully provisioned in 2012 but given the Progression Eastern African Microfinance Equity Fund, that improvement in the situation, the value of the participation invests equity in opportunities in the financial inclusion space has been increased to GBP 112,000. primarily in Kenya, Tanzania, Uganda, Rwanda and Zambia. ▪▪ Afri-nut, an investment fund in nut processing: the losses suffered by this organization have led to a depreciation of Three reclassifications took place: €118,000 resulting in a full provision for the participation. ▪▪ The second loan to PEF has been included in the list of ▪▪ Rabo Rural Fund, a global small producers fund in the participations as the interest rate is directly correlated to Netherlands: Cordaid founded this fund with the Rabo future profits or losses of the organization; inclusion in Foundation and has a 20% participation. In 2013, the participations reflects this risk. underperformance of the fund led to a small €15,000 ▪▪ The acquisition costs of €30,000 for the SME Impact fund depreciation resulting in a total value of €2.454 million. have now been taken into account in the total acquisition ▪▪ Cordaid reviewed all unrealized currency gains and losses price of €1.03m. included in the valuation of its participations and revalued ▪▪ An additional financing of USD45,000 for Pyme-Capital had all its participations at 31 December 2013 so that unrealized been capitalized and has now been added to our existing gains and losses are only included in the valuation of equity participation of USD2m resulting in a total of impaired participations. This review results in a currency USD2.045m. loss in 2013 of €571.000. One participation has been de-committed: the €2m equity participation in the MFI investment fund Social Equity Foundation (SEF) has been cancelled after the fund failed to realize its first investments. The €238,000 participation in SIDI is no longer considered strategic as it is not aligned with Cordaid’s aim to balance social impact and financial return. SIDI has agreed to buy Cordaid’s shares back over time. In 2013, shares with a cost price of €50,000 were sold for the same amount.

A number of revaluations have taken place reflecting the improvement or worsening of the situation of some of our equity participations and the variations in currency rates. The total revaluations of intrinsic values amounted to losses of €1.0m. The most important variations were: ▪▪ Cordaid sold its participation in the Indonesian Bank Andarra to the Hivos Triodos Fund and no longer has a direct connection with Bank Andarra. Instead, a loan has been granted to the Hivos Triodos Fund. The valuation of this loan is directly related to the performance of Bank Andarra. To reflect this risk, the loan is included in the list of participations and replaces the sold participation in Bank Andarra. The intrinsic value of the loan has decreased by €804.000, including an unrealized currency loss of €368.000, resulting in a closing value of €658.000. ▪▪ Dia Vikas, a microfinance investment fund in India: the intrinsic value decreased by €368,000 and currency losses led to a depreciation of €282,000, resulting in a closing value of €1.262 million. At year-end 2013, the €2.5m convertible loan committed in 2012 had not yet been disbursed. Cordaid was not exposed to any financial risk on this additional participation at the end of the closing period.

48 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

6 . INVESTMENTS Bonds can be broken down as follows by term to maturity:

Cordaid has instructed Schretlen & Co Asset Management as its X € 1,000 31/DEC/2013 31/DEC/2012 main investment custodian to pursue a highly prudent policy, Falling due in less than 1 year 9,261 6,559 ensuring that the principal amount of a portfolio investment is always guaranteed. Investments are made in non-convertible Falling due between 1 and 5 years 11,451 16,253 government bonds and bonds of businesses with high credit Falling due in more than 5 years 17,082 14,336 ratings only. Furthermore, the investment horizon is such that the bond loans are released over time. In principle, loans are 37,794 37,148 held to maturity. Portfolio investments must meet strict sustainability criteria. Cordaid invests in businesses that have The bonds have an average remaining maturity term of nearly sound staff policies in place, that protect the environment and four years. The interest rates of the bonds vary 1.1% and 5.2%. that respect human rights. Cordaid applies the UN Global Compact and the Standard for Financial Management of Fundraising Institutions of the Dutch Association of 7 . STOCKS FOR EMERGENCY AID Fundraising Institutions (VFI), as well as a range of supplemen- tary product and process criteria based on the ASN criteria. In Kampala, Uganda stocks of emergency aid goods are stored The asset management principles have been formalized so that they can be quickly made available in the African region in a Treasury Statute that has been posted on www.cordaid- when needed. At 31 December 2012, there was a similar stock of jaarverslag.nl. Sustainalytics screens the investment portfolio relief goods (€ 346,000) stored in the same location. These had a number of times per year and reports the outcome to Cordaid. not been included in the 2012 balance sheet as they were assigned to emergency aid projects in the eastern part of the The bonds can be specified as follows: Democratic Republic Congo.

X € 1,000 31/DEC/2013 31/DEC/2012 X € 1,000 31/DEC/2013 31/DEC/2012

Bonds Stocks for emergency aid

Government bonds 5,613 5,802 - Tarps 112 0

Municipalities Bank (BNG) / 4,481 6,447 - Khanga cloth, blankets, 120 0 Waterschap Bank bednets & bags

Total government-guaranteed bonds 10,094 12,249 - Sanitary Kits 82 0

Foreign government bonds 14,880 12,227 - Kitchen sets 39 0

Banks 9,190 10,456 353 0

Other bonds 3,630 2,216

37,794 37,148 8 . RECEIVABLES The portfolio is carried at fair value (the nominal value is €35.7m). The fair value of the invested position in bonds All receivables have a remaining maturity of less than one year. increased by €0.6m to an invested amount of €37.8m. Receivables decreased by €6.1m. The following changes occurred in the bond portfolio during 2013: X € 1,000 31/DEC/2013 31/DEC/2012 ▪▪ 10 bonds matured, meaning the invested amount of €6.9m Receivables was returned; ▪▪ €2.6m of the returned amount was reinvested in bonds; - Dutch Government 17,373 24,260 ▪▪ €6.0m was invested in the ASN Sustainable Bond Fund. The - Other governments and 8,520 6,644 fund invests in bonds of governments that deal responsibly organisations with human rights, climate and biodiversity; - Provision uncollectable -286 0 ▪▪ the fair value of the bonds decreased by €1.2m; receivables from governments ▪▪ €0.2m was received as stock dividend on the ASN Fund. - Receivable from inheritances 7,144 9,764

- Interest receivables 1,404 1,550

- Other receivables 3,475 1,469

37,630 43,687

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The receivable from inheritances in 2013 was €7.1m (2012: € 9.8 Cordaid agreed in 2013 on a subordinated loan of €0.3m to the million). The decrease is due to Cordaid receiving an exception- Dutch Committee-Veterinary Programs located in Lelystad. al number of high-value legacies in 2012. The 2012 legacy The €0.1m loan in 2012 was fully repaid in 2013. The balance receivable was largely settled in 2013. In 2013, the number of prepayments is €0.6m. This balance consists of €0.3m on of allocated but not yet received inheritances is the same but housing expenses such as prepaid rent and catering. An the average value is less. amount is €0.1m has been prepaid on office expenses. The remaining €0.2m has been prepaid on marketing and program Contracts with back donors for own management programs expenses. The other receivables amount to €0.4m. An amount lead to a receivable if costs are incurred for them or if there are of €0.2m relates to Global Impact. Global Impact is a new contract liabilities with third parties. The receivables on back strategic partner supporting Cordaid with fundraising in the donor financed projects have been accounted for in the line US. The other €0.2m relates to receivables for Cordaid staff item ‘Other governments and other organizations’. Receivables detached to other fundraising organizations. involving MFS II projects and additional projects through the Dutch government have been recognized in the line item ‘Dutch government’. For more details on government grants 9 . CASH AND BANK refer to section 16. Cash and bank comprise cash and bank balances, both in the INTEREST RECEIVABLE Cordaid office in The Hague and in the emergency relief and X € 1,000 31/DEC/2013 31/DEC/2012 liaison offices abroad, and deposits falling due in less than one year. Cash and cash equivalents rose slightly as a percentage Interest receivables compared to 2012, up to €73.3m at year-end (2012: €72.4m). - Banks & deposits 384 436

- Bonds 649 705 X € 1,000 31/DEC/2013 31/DEC/2012

- Loans & guarantees (relief 371 409 Cash and cash equivalents efforts) - Deposits 21,322 35,434 1,404 1,550 - Bank accounts 51,894 36,864

- Cash in hand 57 80

Interest receivable relates to the bond portfolio, outstanding 73,273 72,378 deposits, savings deposits and outstanding loans and guaran- tees relating to Cordaid’s objectives. The decrease in the amount is in line with the market performance of bonds and All cash is at Cordaid’s free disposal, except for that portion of bank interest whose performance was weaker compared to the cash that relates to guarantees: 2012. For more details refer to section 6. 1. EU funding for programs in the Central African Republic and World Bank funding in DR Congo and Congo Brazzaville. OTHER RECEIVABLES These are four guarantees for a total amount of €4.6m. X € 1,000 31/DEC/2013 31/DEC/2012 2. Rent agreement for €0.2m (one guarantee).

Other receivables

- Subordinated loan 250 120

- Security deposit 55 55

- Loans to staff 0 167

- Prepayments 574 453

- Current account BVA 2,243 0

- Other receivables 353 674

3,475 1,469

The total increase in the other receivables and accrued income is mainly due to the Vastenaktie receivable for projects pre-financed by Cordaid. In 2012, Cordaid had a debt to the Vastenaktie as this was the first year after separation from the Cordaid organization. The current account for Vastenaktie will be settled in 2014.

50 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

10 . RESERVES AND FUNDS

X € 1,000 CONTINUITY TANGIBLE EARMARKED RESTRICTED SEMI- RESTRICTED TOTAL RESERVE FIXED ASSETS RESERVES FUNDS RESTRICTED FUND LOANS & RESERVES RESERVE FUNDS GUARANTEES AND FUNDS

Opening balance 9,944 942 0 1,623 26,329 80,625 119,463 1 January 2013

Changes

Extraction 0 -43 0 -5,437 -17,301 0 -22,781

Dotations 2,331 0 10,733 10,589 0 3,371 27,023

Closing balance 12,275 899 10,733 6,775 9,028 83,996 123,706 31 December 2013

Continuity reserve Earmarked reserves The continuity reserve is designed to create a sufficiently large Earmarked reserves are comprised of interest income and buffer to enable Cordaid to complete ongoing programs income from investments financed with temporary surpluses appropriately, including staffing them with our own people, of semi-restricted funds. In prior years Cordaid classified this if one or more key sources of funding were to dry up unexpec­ income as semi-restricted. However, given the fact that the tedly, and with due observance of existing legal and moral income also contains interest on interest and income from obligations. investments financed with interest income, the allocation of this income to semi-restricted funds was very difficult to Currently, the political climate is unfavorable for development estimate accurately. Therefore, the cumulative income from aid while related public and political support for international interest and investments that could not be properly allocated development is decreasing every year. An important example to the semi-restricted funds is now classified as earmarked of this trend is the Dutch Government’s MFS II program that reserves. The reserves are earmarked for spending on objectives. will end in 2015. Total income from the MFS-II grant in 2013 The allocation of these reserves to different themes, programs amounted to €71.5m (2012: €66.7m) or approximately 40% (2012: and objectives is subject to a decision of the Board of Directors. 52%) of Cordaid’s total income. Taking into account the environ- The decision-making is based on internally agreed criteria. ment sketched above, the continuation of the MFS program at The total amount of earmarked reserves is €10.7m. During 2013, this level of funding after 2016 is unlikely. Cordaid needs to be €5.2m of the reserves was spent on objectives. able to operate without MFS (or with smaller grants) and continue to achieve impacts as a significant international Designated project funds player in the international development sector. This challenge Designated project funds are comprised of restricted and results in Cordaid making tough strategic decisions so that it semi-restricted funds. Restricted funds are funds received for continues to attract new (both national and international) an earmarked purpose, such as incoming resources for specific donors and/or by reducing the headcount. The worst-case SHO campaigns; semi-restricted funds are accruals on own scenario of drastically reducing the headcount has obviously a fundraising that are not earmarked for a specific purpose or significant social and financial consequence. The financial are earmarked for a broadly defined purpose (usually linked to consequence of this scenario (reorganization cost) needs to program purposes). be included in the calculation of the continuity reserve. Restricted funds increased due to income on the SHO cam- The controller and the Board of Directors have made a (worst paign for the Philippines in November 2013, which was not case) scenario analysis that takes into account a reorganization fully spent at 31 December 2013. For details, see below and the with a possible significant decrease in the headcount. The separate notes later in these annual accounts. resulting continuity reserve amounts to €12.3m or €2.3m more than in 2012. This is still well below the Herkströter require- Incoming resources and expenditures through SAN! are also ment of no more than 1.5 times total operating expenses. disclosed in the restricted project fund. The partner payment for 2013 was a gross amount of €526,000. Net of €50,000 in Tangible fixed assets reserve overheads, an amount of €476,000 was added to the SAN! fund. The tangible fixed assets reserve is a restricted reserve to Program costs for SAN! projects in 2013 amounted to €417,000 enable replacement of current tangible fixed assets when (2012: €333,000). fully written off. The funds made available by the Josephine Nefkens fund were fully committed in 2013 for the following project: ‘Improval maternal and infant health in rural Ghana’. Additionally, Cordaid received and incurred project expenses using the Ineke Feitz Fund for healthcare projects focusing on vulnerable children in Africa and Asia.

APRIL 2014 © CORDAID 51 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

X € 1,000 OPENING INCOMING OVERHEAD PROJECT CLOSING BALANCE RESOURCES FEE RESOURCES BALANCE 1 JANUARY 2013 EXPENDED 31 DECEMBER 2013

Mensen in Nood

SHO campaign Syria 0 1,115 -78 -1,037 0

SHO campaign Philippines 0 5,848 -35 -1,000 4,813

Adoptions 280 292 -34 -297 241

Emergency Aid & Rehabilitation Pakistan 315 0 0 -19 296

Emergency Aid & Rehabilitation Philippines 32 1 0 8 41

Other charitable activities 359 103 0 -443 19

986 7,359 -147 -2,788 5,410

Kinderstem

Adoptions -5 511 -58 -431 17

Ineke Feitz Foundation 10 0 0 -10 0

5 511 -58 -441 17

Memisa

Adoptions 237 604 -66 -432 342

Josephine Nefkens 0 400 0 -400 0

Personalized fund - Local Heroes 28 0 0 0 28

Stop Aids Now! 371 526 -50 -417 430

Ineke Feitz Foundation -168 1,096 0 -601 327

Other charitable activities 164 93 0 -36 221

632 2,719 -116 -1,886 1,348

1,623 10,589 -322 -5,115 6,775

Personalized fund The item ‘personalized funds’ relates to: ▪▪ Local Heroes fund of € 50,000. These resources will be used in five annual instalments. To 2013, € 22,000 has been used for program activities and a further € 28,000 will be available over the next three years.

52 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

SHO PHILIPPINES

X € 1 2013 UP TO AND INCLUDING 2013

EMERGENCY AID RECONSTRUCTION TOTAL EMERGENCY AID RECONSTRUCTION TOTAL

Incoming resources from third party 5,848,415 5,848,415 campaigns

Intrest - -

Total incoming resources 5,848,415 5,848,415

Preparation and coordination costs 35,000 35,000

Total available for charitable activities 5,813,415 5,813,415

Resources expended

Commitments undertaken by participant

- support offered through local relief 1,000,000 - 1,000,000 1,000,000 - 1,000,000 providers

- support offered through international ------umbrella organisation

- support offered through participant ------

1,000,000 - 1,000,000 1,000,000 - 1,000,000

Available commitment capacity - 4,813,415

X € 1 2013 UP TO AND INCLUDING 2013

EMERGENCY AID RECONSTRUCTION TOTAL EMERGENCY AID RECONSTRUCTION TOTAL

Breakdown of participant’s cash flows

Transfer by participant for:

- support offered through local relief 500,000 - 500,000 500,000 - 500,000 providers

- support offered through international ------umbrella organisation

- support offered through participant ------

Total transferred 500,000 - 500,000 500,000 - 500,000

Breakdown of resources expended locally

- support offered through local relief 500,000 - 500,000 500,000 500,000 providers

- support offered through international - - - - umbrella organisation

- support offered through participant - - - -

Total resources expended 500,000 - 500,000 500,000 - 500,000

At 31 December 2013, Cordaid had not received a financial report (with audit opinion) to account for resources expended locally. Projects had only just been commenced and the results from the planned audits in the Q1 of 2014 were not yet available. The amount reported as resources expended locally is based on the financial reports prepared by our partner organizations.

APRIL 2014 © CORDAID 53 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

SHO SYRIA

X € 1 2013 UP TO AND INCLUDING 2013

EMERGENCY AID RECONSTRUCTION TOTAL EMERGENCY AID RECONSTRUCTION TOTAL

Incoming resources from third party 1,114,905 1,114,905 campaigns

Intrest - -

Total incoming resources 1,114,905 1,114,905

Preparation and coordination costs 78,043 78,043

Total available for charitable activities 1,036,862 1,036,862

Resources expended

Commitments undertaken by participant

- support offered through local relief 1,036,862 1,036,862 1,036,862 1,036,862 providers

- support offered through international - - - umbrella organisation

- support offered through participant - - -

1,036,862 - 1,036,862 1,036,862 - 1,036,862

Available commitment capacity - 0

X € 1 2013 UP TO AND INCLUDING 2013

EMERGENCY AID RECONSTRUCTION TOTAL EMERGENCY AID RECONSTRUCTION TOTAL

Breakdown of participant’s cash flows

Transfer by participant for:

- support offered through local relief 1,036,862 - 1,036,862 1,036,862 - 1,036,862 providers

- support offered through international ------umbrella organisation

- support offered through participant ------

Total transferred 1,036,862 - 1,036,862 1,036,862 - 1,036,862

Breakdown of resources expended locally

- support offered through local relief 1,036,862 - 1,036,862 1,036,862 - 1,036,862 providers

- support offered through international ------umbrella organisation

- support offered through participant ------

Total resources expended 1,036,862 - 1,036,862 1,036,862 - 1,036,862

Due to the ongoing conflict in Syria, the audit report for one of the partner organizations had not yet finalized by the time of adoption of these annual accounts. Therefore, approximately 40% of the amount stated as resources spent locally had not yet been audited. The presented amount is based on the figures in the financial report of the partner organization concerned.

54 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

SHO HAITI

X € 1 2013 UP TO AND INCLUDING 2013

EMERGENCY AID RECONSTRUCTION TOTAL EMERGENCY AID RECONSTRUCTION TOTAL

Incoming resources from third party - 29,125,761 campaigns Incoming resources from joint - 1,609,546 campaign relating to CARE guest participant Incoming resources from joint - 1,584,000 campaign relating to Habitat for Humanity guest participant Intrest - 60,319 Total incoming resources - 32,379,626

Preparation and coordination costs 0 1,947,346 Preparation and coordination costs of 0 31,776 guest participants Total available for charitable activities - 30,400,504

Resources expended Commitments undertaken by participant - support offered through local relief - - - 2,679,155 57,155 2,736,310 providers - support offered through international ------umbrella organisation - support offered through participant - - - 1,608,723 22,893,701 24,502,424 - support offered through CARE guest - - - - 1,593,610 1,593,610 participant - support offered through Habitat for - - - - 1,568,160 1,568,160 Humanity guest participant - - - 4,287,878 26,112,626 30,400,504 Available commitment capacity 0

X € 1 2013 UP TO AND INCLUDING 2013

EMERGENCY AID RECONSTRUCTION TOTAL EMERGENCY AID RECONSTRUCTION TOTAL

Breakdown of participant’s cash flows Transfer by participant for: - support offered through local relief - - - 2,679,155 57,155 2,736,310 providers - support offered through international ------umbrella organisation - support offered through participant - 23,330 23,330 1,608,723 22,893,701 24,502,424 - support offered through CARE guest - - - - 1,593,610 1,593,610 participant - support offered through Habitat for - - - - 1,568,160 1,568,160 Humanity guest participant Total transferred - 23,330 23,330 4,287,878 26,112,626 30,400,504 Breakdown of resources expended locally - support offered through local relief - - - 2,679,155 57,155 2,736,310 providers - support offered through internation------al umbrella organisation - support offered through participant - 23,330 23,330 1,608,723 22,893,701 24,502,424 - support offered through CARE guest - - - - 1,593,604 1,593,604 participant - support offered through Habitat for - - - - 1,568,105 1,568,105 Humanity guest participant Total resources expended - 23,330 23,330 4,287,878 26,112,565 30,400,443

APRIL 2014 © CORDAID 55 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

Semi-restricted funds Cordaid started reorganizing its operations in 2012. This The withdrawal from the semi-restricted funds of € 17.3 million includes a critical analysis of the workforce in response to a results from the appropriation of funds. As a consequence of drastic reduction in government grants. It was decided in the change in accounting estimate for determining which consultation with the trade union and Works’ Council to funds are earmarked by third parties an amount of €10.7m was reduce the headcount. Cordaid drew up a redundancy plan to reclassified as an earmarked reserve. Furthermore, approxi- deal responsibly with the consequences for staff. The estimated mately €4.3m was allocated and spent on one of Cordaid’s cost of €1.4m, of which €1.0m was expended in 2013, was broader objectives. recognized in the redundancy plan provision and charged to the various departments where the affected employees worked. Restricted fund loans & guarantees The Loans & Guarantees Fund comprises the resources that In 2013, Cordaid identified nine (closed) back donor projects, have been accrued within the scope of the Loans & Guarantees where re-audits revealed omissions in Cordaid’s compliance Program. The resources for the Loans & Guarantees Fund stem with the grant requirements of the back donor. A re-audit on from the co-financing program and from own resources. seven projects that had previously been audited without The gain of €2.6m on this Loans & Guarantees Program in 2013 showing ineligibilities showed omissions in the available was recognized through the sub-funds. documents which were not properly archived after the closure of the project. X € 1,000 TOTAL In one project, a Cordaid implementing partner refused a Opening balance 1 January 2013 80,625 project audit following a suspected fraud. Cordaid is not, Income from financial assets issued for objectives 4,144 therefore, able to comply with the grant requirements. On one project there is an ongoing discussion about Cordaid’s Investment income 135 compliance with the grant requirements. A different view on Income from cash and cash equivalents 239 what procedures where applicable during the project is the Recharged overhead fee 595 cause of this discussion. Cordaid estimates that an amount of €1.4m should be repaid Direct costs -913 to the back donors in 2014. Recharged indirect costs -829 For all related projects Cordaid the project results are not under Closing balance 31 December 2013 83,996 discussion. Cordaid believes that the resources of the back donor are spent in line with the original objectives of the involved projects. Compliance with formal rules, however, 11 . PROVISIONS is under discussion.

The composition of, and movements in, the provisions were as The jubilee and farewell provision was formed to cover jubilee follows: and farewell benefits. This provision was determined on the basis of the jubilees and planned staff exits of which Cordaid X € 1,000 REDUNDANCY BACKDONOR JUBILEE TOTAL had knowledge in 2013. PROVISION PROJECTS AND FAREWELL At present, no legal proceedings are pending for which a PROVISION provision should be formed. Opening balance 1,362 0 35 1,397 1 January 2013 All provisions will be settled within one year.

Changes

- Allocated 37 1,405 0 1,442

- Withdrawn -845 0 -20 -865

- Released -198 0 0 -198

Closing balance 356 1,405 15 1,776 31 December 2013

56 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

12 . CURRENT AND NON-CURRENT 13 . OFF BALANCE SHEET LIABILITIES COMMITMENTS AND CONTINGENCIES

The composition of, and movements in, the current and Off balance sheet rights non-current liabilities were as follows: MFS II Alliances X € 1,000 31/DEC/2013 31/DEC/2012 Cordaid is a member of two alliances that receive MFS II funding from the Dutch Ministry of Foreign Affairs. The Non-current liabilities Connect4Change alliance supports organizations and persons Project commitments 3,091 2,864 in the South in using IT tools to achieve development objec- tives. IICD serves as lead agency for this alliance. Cordaid 3,091 2,864 carries out projects within the Alliance’s health program, for Current liabilities which €1.2m will be received annually through 2015. The Project commitments 43,236 48,759 Partner for Resilience Alliance aims to make communities in the South more resilient against disasters by working on food Deferred grants from other 5,749 3,422 governments security, good governance and the management of natural resources. The Netherlands Red Cross serves as lead agency of Deferred grants from Dutch 214 5,262 this Alliance. Cordaid will receive €2.5m annually through 2015. government

Accounts Payables 1,413 4,161 Financing contracts with donors

Taxes and social security 1,072 1,052 Cordaid signed several large financing contracts or received contributions guarantees for carrying out specific projects in 2013. Cordaid recognizes the incoming resources from these financing Reservation for leave days and 1,608 1,524 holiday allowance contracts and grant decisions in accordance with Dutch Accounting Standard 274. This means that incoming resources Participations payable 8,850 8,636 are recognized at the time resources are actually expended. The Other accruals and deferred 139 318 difference between the income recognized and the actual income amount received in the form of contributions from donors is 62,281 73,134 recorded in the balance sheet. This results in a receivable if more resources have been expended than received or in a deferred grant if incoming resources are greater than those Outstanding project commitments decreased €5.6m compared expended. Therefore the full amount of the contract is not to the previous year. All non-current liabilities fall due in less disclosed in the annual accounts. Note that the Dutch account- than five years. For more details on program costs, refer to ing standards and therefore the accounted cost can differ from section 20. what was reported to the related donors.

The deferred grants decreased significantly by €2.7m as in 2012 significant multiple government grants were secured where the donation was received before the project started. In 2013, progress on these projects accelerated causing a lower deferred grant.

The accounts payable are substantially lower as in 2013 we have a receivable rather than a payable to Vastenaktie (2012: €1.6m), refer to section 8. The remaining amount relates to the ac- counts payable (2012: €2.6m) to multiple creditors.

All current liabilities are payable within one year.

APRIL 2014 © CORDAID 57 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

What follows is a list of financing contracts and grant decisions in excess of €1m in 2013.

X € 1,000

FUNDING DESCRIPTION OF DURATION CONTRACT INCOME INCOME CUMULATIVE BALANCE TO ORGANISATION THE PROJECT VALUE 2012 2013 INCOME BE SPENT

Global Fund Care, treatment and Jul 2012 - Dec 2014 45,115 8,788 21,121 29,909 15,206 prevention of HIV/AIDS in DR Congo

Dutch Ministry of Provision of effective Jan 2013 - Dec 2015 29,644 - 10,310 10,310 19,334 Foreign Affairs sexual and reproductive health services for next generations in Burundi, Rwanda and DR Congo

World Bank Results based financing Jul 2013 - Oct 2015 14,527 - 5,087 5,087 9,440 of healthcare in Zimbabwe

Dutch Ministry of Results based financing Oct 2012 - Dec 2015 4,353 1,146 827 1,973 2,380 Foreign Affairs (1) of government services in Burundi and the DR Congo

World Bank/Ministry of Results based financing Oct 2012 - Dec 2013 2,570 - 2,525 2,525 45 Health and Population of health services in of Congo (2) Republic Congo

World Bank//Ministry Results based financing Jul 2012 - Dec 2014 2,502 224 1,687 1,911 591 of Health Cameroon of public healthcare in Cameroon

Royal Tropical Insitute Reducing maternal Jan 2013 - Dec 2015 1,953 - 15 15 1,938 (KIT) (3) mortality and improving accessibility of reproductive health care in South Sudan

Dutch Ministry of Strengthening (young) Oct 2013 - Sep 2016 1,799 - 1,304 1,304 495 Foreign Affairs (4) female leadership in the Middle East

GAVI Alliance Improving basic Feb 2013 - Jun 2014 1,508 - 568 568 940 healthcare services through results based financing in 2 provinces in Burundi

European Union (5) Risk reduction during Jan 2012 - June 2013 1,200 562 638 1,200 - droughts in Kenya and Ethiopia

European Union Providing basic Jun 2013 - Dec 2013 1,020 - 1,020 1,020 - healthcare in 7 districts of Uruzgan in Afghanistan

Grand total 106,191 10,720 45,102 55,822 50,368

1. The grant request was made in cooperation with Vereniging van Nederlandse Gemeenten (VNG) en the Center for International Legal Cooperation (CILC). Included in the total awarded grant is an amount of €550,000 reserved for VNG and €568,000 for CILC. 2. The contract was revised in July 2013. As a result the total awarded grant was reduced by approximately €800,000. Shortly after 31 December 2013, the duration of the contract was extended until the 1 May 2014 and an additional budget of approximately €400,000 was granted to Cordaid and implementing partner Memisa Belgium for this period. 3. The contract is part of a grant awarded by the Dutch Ministry of Foreign Affairs. The Royal Tropical Institute is the lead agency of the Alliance that made the project proposal. 4. The project proposal was done in cooperation with IKV Pax Christi. Cordaid acts as lead agency with the Dutch Ministry of Foreign Affairs. An amount of €886,000 is reserved for IKV Pax Christi. 5. This project finished in July 2013.The final settlement is expected in the second quarter of 2014.

58 APRIL 2014 © CORDAID Cordaid’s 2013 Financial Statements CORDAID 2013 ANNUAL REPORT

X € 1,000 INEKE FEITZ USUFRUCT TOTAL Human Security Collective

Receivable: The Human Security Collective (HSC) carries out part of Cordaid’s former Conflict Transformation program. Cordaid - in less than 1 year 1,000 0 1,000 signed an agreement to financially support the HSC for the - between 1 and 5 years 1,000 442 1,442 period 2012-2016. Every year, Cordaid and HSC agree upon Cordaid’s contribution based on the financial needs of HSC. - in more than 5 years 0 0 0 The 2013 financial contribution of €471,000 has already been Total 2,000 442 2,442 paid by Cordaid and is included in the statement of income and expenditure. The financial contributions for 2015 and 2016 have not yet been determined and are therefore not included in the Other off-balance sheet rights statement of income and expenditure. ▪▪ Cordaid has entered into an alliance for 2011-2015 with the Ineke Feitz Stichting (IFS) on the financial support of local Overheads partner organizations carrying out projects focusing on At year-end, off balance sheet liabilities for overheads were as vulnerable children in India, the Philippines, Cameroon and follows: Sierra Leone. ▪▪ On 6 March 2009 Cordaid signed a new lease for its office ▪▪ Cordaid received 16 legacies estimated at €0.4m which were building. The lease runs to 31 October 2019. The associated still subject to usufruct at the reporting date and therefore commitment amounted to €5.0m (exclusive of price are not reported as income in the statement of income and indexation) at year-end 2013. expenditure. ▪▪ Cordaid’s Kinshasa office in DR Congo has been leased by contract from September 2013 to August 2016. The remaining Off balance sheet commitments commitment after 2013 amounts to €0.4m. ▪▪ Cordaid has signed contracts with Cendris and Axiom for Obligations fall into two components: project commitments database maintenance and marketing software licenses, and other obligations. respectively. ▪▪ Catering services are outsourced to Office Service Partners MFS II alliance BV, a specialized catering organization. Cordaid serves as lead agency for the “Communities of Change” alliance. The Dutch Ministry of Foreign Affairs has committed During the reporting period lease payments amounting to €356.9m to the alliance for the period 2011-2015 subject to €949,000 are included in the statement of income and budget; in other words, the Ministry can change its decision expenditure. if there are insufficient resources in the government budget. Cordaid receives the funds from the Ministry and bears X € 1,000 OFFICE OFFICE CATERING AXIOM & TOTAL responsibility for carrying out the agreed programs. The LEASE THE LEASE CENDRIS Alliance has agreed the following allocation of the resources HAGUE KINSHASA across the 2011-2015 budget period: Payable:

- in less than 859 131 86 87 1,163 X € 1,000 1 year

ALLIANCE MEMBER PROGRAMS AMOUNTS - between 1 3,434 219 64 88 3,805 2011 - 2015 and 5 years

Both ENDS Entrepreuneurship 3,359 - in more 715 0 0 0 715 than 5 years Cordaid All 326,230 Total 5,008 350 150 175 5,683 IKV Pax Christi Conflict transformation 3,359

Impunity Watch Conflict transformation 2,136 Cordaid has sublet a section of its office space to Mensen met Mensen met een Missie Conflict transformation 12,238 een Missie, Melania, Justitia et Pax and the Human Security Nederlandse Rode Kruis Conflict transformation, 6,719 Collective for a total annual rent of €0.3m. The rent charged by Health and Well-being Cordaid is in line with the current market prices for office rent. Wemos Health and Well-being 2,889 The transactions are done at arms’ length.

356,930

If the Ministry were to apply the budget restriction in the coming years, the Alliance will discuss the allocation of any cutbacks.

APRIL 2014 © CORDAID 59 CORDAID 2013 ANNUAL REPORT Cordaid’s 2013 Financial Statements

14 . OWN FUNDRAISING

X € 1,000 CORDAID MENSEN IN KINDER- MEMISA MICRO BZN TOTAL TOTAL GENERAL NOOD STEM CREDIT 2013 2012

Donations and gifts 269 6,139 5,972 7,174 491 279 20,324 18,781

Mailing campaigns 0 171 3 109 12 0 295 549

Legacies 139 3,679 410 3,219 80 121 7,648 10,975

Materials sold 0 0 0 0 0 63 63 83

408 9,989 6,385 10,502 583 463 28,330 30,388

Income from own fundraising amounted to € 28.3m, € 2.3m under budget and € 2.1m lower than in 2012. In 2013, income from legacies decreased by €3.3m to €7.6m (2012: €11.0m). This is explained by a lower average inheritance receivable. An increase in income from donations, gifts, donations and mailings partly compensates for this decline in income from inheritances. Net revenue from materials sold amounted to €76,000; costs of materials sold were €13,000.

15 . THIRD-PARTY CAMPAIGNS 16 . GOVERNMENT GRANTS

X € 1,000 2013 2012 X € 1,000 2013 2012

SHO - Syrië 1,115 - Dutch Government - MFS II 71,535 66,700

SHO - Philippines 5,848 - Dutch Government - Alliances 3,974 3,937

Nationale Postcode Loterij 2,750 4,022 Dutch Government - Other 12,893 -420

Stichting Bisschoppelijke Vastenaktie 3,184 2,588 World bank 11,038 2,721

Stop Aids Now! 500 500 GlobalFund & United Nations 21,376 7,884

Caritas 0 219 European Union 2,272 1,458

Other 2,927 2,518 Other 7,656 111

Total income third party campaigns 16,324 9,847 Total government grants 130,744 82,391

At €16.3m, incoming resources from third-party campaigns Incoming resources from government grants totaled €130.7m were €0.1m higher than budgeted and more than €6.5m higher in 2013, up €48.3m on 2012. Government grants comprise than 2013. This was largely attributable to the two major programs income under the Dutch government’s co-financing national SHO campaigns in 2013 for victims of the civil war in program (MFS II) and project funding provided by such bodies Syria, which raised €1.1m, and €5.8m for the victims of the as the European Union, the Dutch government, the Global typhoon Haiyan. For a complete overview of the income and Fund and various United Nations organizations. expenditure of these two campaigns, see the notes on the reserves and funds. The grant that Cordaid received from the Dutch government’s co-financing program (MFS II) rose by over €4.8m against 2012. Incoming resources via Stop Aids Now! (SAN!) amounted to As agreed in a monitoring protocol, a separate statement on the €0.5m (2012: €0.5m) and the standard contribution from the MFS II program is prepared for the Dutch government. Cordaid Dutch National Postcode Lottery (NPL) was €2.8m (2012: €2.8m). serves as lead agency of the Communities of Change Alliance. In 2012 Cordaid received an additional €1.3m NPL contribution Incoming resources from partners under the MFS II program for the Waterdrops project supporting people in Bangladesh in are recognized within the Dutch Government - Alliances item. their fight for and against water. In 2013 Cordaid did not receive an additional contribution. Cordaid signed some very large contracts with other institu- tional donors in 2012 and 2013, see also section 13. The annual Part of the third-party campaigns was income from the accounts only show the amounts for which there is a spending matching-fund of BU Domestic in the amount of €2.4m. or payment obligation. The main commitments are: Various Dutch public interest organizations raise funds for ▪▪ Global Fund: a two-and-a-half year contract of USD60m, this matching fund and Cordaid matches their donations. of which €21.1m is attributable to 2013 (2012: €8.8m) for Cordaid and the public interest organizations then work combating and mitigating the effects of HIV/AIDS in six together to donate these funds to shared charitable causes. provinces of the DR Congo. ▪▪ World Bank: a contract for improving the availability, Incoming resources of €3.2m (2012: €2.6m) were received for accessibility and quality of health centers in East Cameroon, Vastenaktie projects. DR Congo and Zimbabwe;

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▪▪ Dutch Ministry of Foreign Affairs: a contract for effective 18 . INVESTMENT INCOME sexual and reproductive health services for future generations in Burundi, Rwanda and the DR Congo. Investment income includes interest and other income from ▪▪ In the item other donations the income from World Bank bond loans, interest earned on the bank account and currency grants made available through local governments are gains and losses. What follows is a seven-year summary of this accounted for an amount of €5.4m. The grants are used for item: results-oriented financing of government health services in Burundi, Sierra Leone, Zimbabwe, Cameroon and Congo X € 1,000 2009 2010 2011 2012 2013 Brazzaville. Interest received on 1,244 1,192 1,077 1,104 1,385 bonds 17 . GAINS ON FINANCIAL ASSETS Interest received on cash 414 404 973 969 810 and cash equivalents

Gains and losses on financial assets issued in connection Realised exchange gains 537 46 -129 -189 -157 and losses with the objectives comprise interest and commission received on loans and participations, as well as project income and Unrealised exchange 832 379 77 869 -1,189 currency gains and losses. gains and losses Gross investment income 3,027 2,021 1,998 2,753 849 X € 1,000 2013 2012 Investment costs -44 -51 -38 -43 -51 Approved MFS II grants 6,645 3,832 2,983 1,970 1,960 2,710 798 Interest received on loans and 1,507 1,724 guarantees

Income from provision guarantees 189 27 Compared to 2012, income from investments decreased to €0.9m, partly due to an unrealized exchange rate loss of €1.2m. Impaired loans and guarantees -1,597 -1,005 Based on the average capital invested, the yield was 0.4% (2012: Revaluation of participations -1,032 -507 6.00%). The lower yield is in line with bond market deteriora-

Currency gains and losses -2,450 -1,148 tion in 2013 in favor of equity markets.

Allocated to/withdrawn from 882 1,043 provision for loans and guarantees X € 1,000 2009 2010 2011 2012 2013

4,144 3,966 Current value 29,062 29,848 28,514 37,148 37,794 Face value 28,675 28,403 27,022 33,923 35,700

Return as a % 7.12% 5.05% 4.04% 6.00% 0.40% This item comprises operating gains and losses on the Loans & Guarantees program. In 2013, the gain of €4.1m was attributable mainly to higher grants from the MFS II program. This higher grant was used to invest in increasing the portfolio 19 . OTHER INCOME of loans, guarantees and participations. The portfolio also suffered extensive losses due to impairment losses, capital X € 1,000 2013 2012 losses and currency losses. - VAT refund 663 0

663 0

As a global non-profit organization, Cordaid has a complex and exceptional international tax position. During 2013, Cordaid contracted the tax consultants of PricewaterhouseCoopers Accountants N.V. to investigate this international tax position; this resulted in a VAT return for the years 2007 – 2010 of €0.6m. This mainly relates to VAT paid in relation to costs for microfi- nance activities outside the EU. A similar investigation is in progress for the years 2011 and 2012.

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20 . SPENT ON OBJECTIVES

Comparison of 2013 program costs and program management costs with the budget

ACTUAL 2013 BUDGET 2013

X € 1,000 PROGRAM PROGRAM TOTAL 2013 PROGRAM PROGRAM TOTAL BUDGET COSTS MANAGEMENT COSTS MANAGEMENT 2013 COST COST

Security & justice 8,264 861 9,125 6,895 617 7,512

Urban matters 1,105 627 1,732 2,682 230 2,912

Extractives 3,319 868 4,187 4,214 522 4,736

Women’s leadership 8,582 716 9,298 6,320 535 6,856

Disaster response 21,279 2,365 23,644 26,150 1,605 27,754

Health care 72,284 2,708 74,992 29,726 4,074 33,800

Child & education 6,180 640 6,820 7,170 745 7,916

Entrepreneurship 1,047 482 1,529 5,951 631 6,582

Food Security 7,905 762 8,667 6,596 804 7,400

Investments 6,213 1,663 7,876 4,304 513 4,817

Domestic 11,720 1,268 12,988 9,786 1,026 10,811

Total cost of programs 147,898 12,960 160,858 109,793 11,302 121,095

In 2012, Cordaid had many projects in the start-up phase and ▪▪ Resources expended on Health & Well-being are €41.2m these became fully operational in 2013. Starting a project under ahead of budget. In 2012, substantial funds were raised own management requires a lot of preparation and planning from institutional donors in particular for results-based time to create a sound management structure through which financing in healthcare in DR Congo and Zimbabwe. In aid can be offered effectively. Now that the management Healthcare’s relief efforts, the Global Fund contracted grant structure has been created, the budget shortfall in 2012 was for the DR Congo is accounted for an amount of €21.7m. partly made up in 2013. For a list of planned projects, see also The Global Fund expenditure includes an amount of €9.2m ‘Off-balance sheet rights’. worth of medicines that has been distributed in part to health centers/patients while part is still in the supply Spending on objectives stood at €160.9m in 2013 (budget: chain. €121.1m), which was €39.8m above budget as large-scale ▪▪ Resources expended on Entrepreneurship was €5.1m below projects funded by back donors proceeded properly. Total budget due to planned projects not being realized on time. program management costs were €1.6m higher than budget ▪▪ The Investments Business Unit that invests in social as a consequence of higher program costs. financial assets saw their program costs increase to €3.1m over budget. In the statement of income and expenditure The largest deviations from budget in spending on objectives are: the re-use of repaid financial fixed assets were not ▪▪ The total program costs for Women’s Leadership were €2.4m recognized as an expenditure in the statement of income above budget as planned projects progressed faster than and expenditure but as a balance sheet movement. The originally projected. re-use of repaid loans & guarantees rose €1.7m and the ▪▪ Resources expended on Disaster Response were €4.2m lower financial assets of newly acquired funds went up €3.1m. than budget. The major national SHO campaign on the Philippines was at year-end. As a result, the full budget was not spent in 2013 and a significant portion will be spent in 2014.

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21 . COST ALLOCATION TO THE DIFFERENT ACTIVITIES

Cordaid uses different allocation keys to allocate costs, making ▪▪ Category 100% FR / 0% PI: Fundraising activities focusing allowance where possible for the recommendations of VFI, the fully on generating donations. For instance: door-to-door Dutch Association of Fundraising Institutions. Costs are collections, notarial deeds for legacies. allocated in three stages. ▪▪ Category 75% FR / 25% PI: Activities focusing on both 1. First, costs relating directly to programs and fundraising are existing and new donors. These activities involve a clear recognized directly within these items. This involves a large request for donations, with a limited public information portion of the costs of the business units (programs) and campaign about the programs/themes in question. For marketing & communication (public information and instance: direct dialogue (street/door/verification calls), fundraising). Costs incurred to secure government grants online donor campaigns, emergency relief mailing, comprise costs racked up by the Tender Desk and costs partnerships (recruiting business donors). incurred in the program sectors to secure project grants (e.g. ▪▪ Category 50% FR / 50% PI: Activities involving a request for via the EU). donations, where equal weight is attributed to the 2. Other costs allocated to programs/fundraising and to fundraising and the public information components. For management and administration include the costs of the instance: events, TV donor recruitment, Margriet magazine. departments defined as head-office departments such as the ▪▪ Category 25% FR / 75% PI: Activities focusing primarily on Board, Policy & Evaluation, Human Resources and public information/awareness, but also involving a request Operations (including the Controller, Financial Accounting, for donations. For instance: donor magazine, written ads/TV IT, Facility Services and Quality & Control) and Marketing and radio ads. Services. FTEs is used as allocation key here. ▪▪ Category 0% FR / 100% PI: Activities with no fundraising 3. In accordance with VFI’s recommendations, virtually all intentions and no request for donations. For instance: costs associated with the Board, the Controller, Quality & thank-you campaigns, online information campaigns, Control and organization-wide communication costs are Annual Reports, TV information campaigns, education, recognized as management and administration costs. Some public information events. of the costs of Financial Accounting are allocated to pro- ▪▪ Activity-based category: Any costs incurred for an activity- grams/fundraising (including payment processing costs and based category are allocated to this category as soon as contacts with banks about these payments); any remaining they are incurred. For instance: house-style materials costs incurred by Financial Accounting are recognized as (e.g. design in DM house style, donor magazine or Annual management and administration costs. Report), memberships (e.g. of VFI, DDMA), market research (e.g. donor satisfaction survey, result analysis). For the 2013 budget, the public information and fundraising costs were categorized and a list was prepared for each category The above-mentioned list of key activities/costs was used to decide outlining the specifics of the percentage of costs that should be on the 2013 budget for both fundraising costs and public infor- allocated to fundraising (FR) and to public information (PI). mation. The relative division between the two activities was: What follows is a list of key activities/costs. 1. Fundraising Cost: 53%; 2. Public Information: 47% The above-mentioned percentages were used to allocate the total 2013 marketing & funding over the two activities.

Costs incurred by the Cordaid departments by the cost categories disclosed in the statement of income and expenditure:

RESOURCES PUBLIC INFOR- PROGRAM COST OF OWN COST OF INVESTMENT MANAGEMENT ACTUAL BUDGETTED ACTUAL EXPENDED MATION / COSTS FUNDRAISING SECURING COSTS AND ADMINI- 2013 2013 2012 (X € 1,000) AWARENESS ACTIVITIES GOVERN- STRATION COST CAMPAIGNS MENT GRANTS

Grants and 0 142,846 0 0 0 0 142,846 104,083 87,963 contributions Publicity and 3,928 959 4,147 27 0 159 9,220 9,742 8,915 communication Staff 1,282 13,223 1,446 344 0 2,086 18,381 17,597 20,636 Travel and 14 686 16 3 0 81 800 817 832 accommodation Housing 86 829 97 23 0 140 1,175 1,101 1,146 Office & General 262 2,313 296 38 0 1,429 4,338 3,611 4,331 Investment costs 0 0 0 0 51 0 51 49 43

Total 5,572 160,856 6,002 435 51 3,895 176,811 137,000 123,867

Budget 5,765 121,095 6,502 496 49 3,093 137,000

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Total operating expenses before having been recharged to 22 . COST OF STAFF programs (i.e. all line items listed above, exclusive of grants and subsidies) amounted to €34.0m in 2013, €1.9m lower than in 2013 2012 2012 and €1m over budget. The largest deviations from budget Head count in The Hague 267.0 271.0 were: ▪▪ Publicity and communication costs of €0.5m under budget. Head count expats at field offices 39.0 24.0 This is in line with the own fundraising costs being under Total head count 306.0 295.0 budget. ▪▪ In addition to salary costs, the employee benefits expense also comprises the cost of outside staff, training and other Average number of The Hague FTEs 234.0 245.5 personnel expenses. At 234.0 FTEs, the average headcount, throughout the year exclusive of employees who are on project payrolls, was 11.5 FTEs lower than in 2012. ▪▪ Office, general and administrative expenses include costs At year-end 2013, Cordaid had a headcount of 306 (2012: 295), incurred for telecommunications, IT, advisory services and of whom 185 were women and 121 men. field offices. In addition to these costs, office, general and administrative expenses also include fees charged by X € 1,000 2013 BUDGETTED 2012 PricewaterhouseCoopers Accountants N.V., our independent - Salaries and wages 13,938 13,734 14,578 auditor. Total audit and advisory fees charged by PricewaterhouseCoopers Accountants N.V. stood at €493,000 - Social security contributions 1,676 1,704 1,877 in 2013 (2012: €340,000). These fees can be broken down as - Pension costs 1,416 1,412 1,451 follows: ▪▪ audit fees for the Annual Report and annual accounts for - Temporary staff 596 0 370 2013: €203,000; - Cost of training and education 412 492 491 ▪▪ audit fees for the execution of the MFSII program and the - Other personnel expenses 343 255 1,869 SHO Haiti program: €21,000; ▪▪ tax advisory fees involving VAT (refer to section other 18,381 17,597 20,636 income) and income tax: €203,000; and ▪▪ other advisory fees: €66,000. The above mentioned salary costs are excluding the salaries of Own fundraising activities the expat staff as these costs are directly financed by projects Own fundraising costs remained under budget due to lower under own management. Salary costs of The Hague staff, costs on publicity and communication. including social security charges and pension contributions, were in line with the budget for 2012. The average salary costs Management and Administration in 2013 were €73,000 per FTE (2012: €73,000). The cost of management and administration is €0.8m above budget as the cost for the UBUNTU reorganization had an Cordaid’s pension plan is administered by Pension fund Zorg en unforeseen overrun. Welzijn, a pension fund for the health and welfare sector. Employees’ retirement and partner pensions are based on their pensionable salary for full-time employment, net of the state pension offset. The pension fund endeavors to index-link any accrued pension entitlements and pensions in payment based on general salary trends in the collective bargaining agree- ments that govern its affiliated employers in a particular year. The pension fund decides every year whether index-linking would be appropriate and, if so, what index to use given the financial situation and expected developments in that situa- tion. In doing so, the pension fund uses nominal and realistic coverage ratios as benchmarks. Although the pension fund may decide to apply catch-up index linking, such a decision will not have retroactive effect and will not trigger subsequent pay- ments. Index-linking is funded partially from contributions and partially from return on plan assets. The coverage ratio stood at 109% in November 2013.

Contributions are recognized as employee benefits expense as soon as they are payable. Prepaid contributions are recognized within prepayments and accrued income if they entail a refund or a reduction in future payments. Contributions payable are disclosed as liabilities in the balance sheet.

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23 . RELATED PARTIES 24 . EXECUTIVE REMUNERATION

Introduction The Supervisory Board adopted the executive remuneration In November 2012, the Cordaid CEO co-founded The Hague- policy, and the level of executive remuneration and other pay based Human Security Collective (HSC) foundation. HSC and benefits. The policy is updated periodically and was protects and expands the operational and political space of civil evaluated most recently in 2011. In determining the remunera- society and puts human security into practice. In 2013, the tion policy and adopting the level of the remuneration, Cordaid Cordaid CEO was one of the HSC’s four Board members and as follows the recommendations for executive remuneration in such during 2013 HSC should be classified as a related party. In fundraising institutions issued by VFI and the Wijffels Code 2014, Cordaid will not have a board member at HSC and as such (see www.vfi.nl). The recommendations use weighting criteria HSC will be fully organizationally independent and no longer a to set a maximum for an executive’s annual income. The most related party of Cordaid. However, Cordaid has the intention to recent VFI standard of 1 January 2012 was used to determine work with HSC on projects with common charitable goals. these weighting criteria, which is a responsibility of Cordaid’s Controller. This has resulted in a so-called BSD score of 496 Besides HSC, Cordaid has not identified any related parties. points for both CEO’s with a maximum annual income of Cordaid does not have a significant influence on its participa- €140,046 and 456 points for the COO with a maximum annual tions, although Cordaid employees are in some cases represent- income of €124,233. The actual executive remuneration for 2012 ed in the Board. Therefore, none of Cordaid’s participations can that was tested against the VFI criteria stood at €111,707 per be classified as a related party. year for R. Grotenhuis (1 FTE/year), at €119,134 for S. Filippini (1 FTE/12 months) and at €119,367 per year for H. van Eeghen Related party transaction: (1 FTE/year). In other words, their remuneration was within In 2013 Cordaid made the following payments to HSC: the maximum amounts defined by VFI. ▪▪ €120,000 for HSC’s 2013 direct program activities; ▪▪ €371,000 for HSC’s 2014 direct program activities; Executive remuneration is comprised of gross salary costs ▪▪ €9,000 for a consultancy assignment staffed by HSC. inclusive of holiday allowance, social security contributions, ▪▪ Additionally, HSC sublets a part of Cordaid’s office space pension costs, expense allowances and year-end bonus. As a for an at arm’s length amount of €9,000. rule, all employees receive a year-end bonus. The cost of the Supervisory Board consists of expenses for general and special meetings and travel costs. In 2013 these costs were €7,475.

At 31 December 2013, the members of the Board were:

S . FILIPPINI R . GROTENHUIS H .L . VAN EEGHEN CEO CEO (*1) COO

Employment contract

Duration permanent permanent permanent

Number of hours 36 36 36

part-time percentage 100 100 100

Period 16/9 - 31/12 1/1 - 31/12 1/1 - 31/12

Gross salary 29,708 95,549 102,114

Holiday allowance 2,377 7,620 8,136

Year-end bonus 2,663 8,538 9,117

Variable pay 0 0 0

Total annual income 34,748 111,707 119,367

Social security contributions (employer’s share) 2,391 8,953 8,206

Taxable allowances (Public transport abonnement) 0 6,484 6,485

Pension costs (employer’s share) 4,084 13,024 13,784

6,475 28,461 28,474

Total remuneration for 2013 41,222 140,168 147,842

Total remuneration for 2012 0 137,237 129,574

Note *1: R. Grotenhuis resigned from Cordaid on his own request and did not receive any separation pay of any kind. R. Grotenhuis was acting CEO until the 15 October 2013 and afterwards acted as advisor to his successor S. Filippini.

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25 . BALANCE SHEET AND STATEMENT OF INCOME AND EXPENDITURE FOR BUSINESS UNIT INVESTMENTS

An important part of the activities of Cordaid’s Investments All figures originate from the figures in Cordaid’s financial Business Unit is related to non-grant projects. Instead of statements. The principles for valuation of assets and liabilities providing a grant to partner organizations, the Investments and revenue recognition are the same in the statements below, Business Unit provides a loan or guarantee to its partners or the only the classification and presentation of several items differ. Business Unit participates in social entrepreneurship with the All items can be traced to items in the figures presented before, same objectives as Cordaid. The partner organizations of the except for cash and investments. Cash and investments are Investments Business Unit are different from Cordaid’s regular allocated to the Investments Business Unit based on the partner organizations. Instead of NGOs or grass-roots organiza- division made in Cordaid’s financial administration The tions, Investments mainly supports Microfinance institutions, Investments Business Unit has separated and designated bank local banks or social funds. As a consequence, the Investments accounts and general investments are separately administered. Business Unit’s stakeholders have different information needs from Cordaid’s financial statements. To fulfil these additional The right column in the statements below refers to the notes information needs, Cordaid presents a separate statement of where the corresponding item can be found in Cordaid’s full income and expenditure and balance sheet. financial statements.

BALANCE SHEET INVESTMENTS BUSINESS UNIT AS OF 31 DECEMBER 2013 X €1,000 NOTE 31/DEC/13 31/DEC/12 31/DEC/11 ITEM IN CORDAID FS Assets Net financial fixed assets issued for objectives - Debt 27,327 29,430 32,622 - Equity 2 21,978 20,957 18,938 - Guarantees 2,580 2,467 6,136 1 51,885 52,854 57,696

- Undisbursed loans and guarantees 3 -7,732 -6,020 -10,025 - Loan Losses 4 -3,248 -4,130 -5,174 -10,980 -10,150 -15,199 Net financial fixed assets issued for objectives 5 40,905 42,704 42,497 5

Net financial floating assets Current account Cordaid 3,610 899 4,785 Non Development investments 18,524 12,945 390 6 Cash and bank 29,810 32,713 32,957 9 Net financial floating assets 51,944 46,557 38,132 Total Assets 92,849 89,261 80,629

Equity and liabilities Equity (Fund Loans & Guarantees) Fund Loans & Guarantees until prior year 7 80,625 76,519 78,362 Capital contributions fiscal year 8 6,645 3,831 -1,438 Operating income fiscal year 9 -3,869 -185 -1,499 Recharged overhead fee fiscal year 10 595 460 1,094 11 83,996 80,625 76,519 10

Liabilities Current liabilities 3 0 0 Undisbursed Equity participations 8,850 8,636 4,110 12 8,853 8,636 4,110 Total Equity and liabilities 92,849 89,261 80,629

1 Gross amount of all commitments by the Investments Business Unit (BU) at year-end, distributed over various instruments. Overall level is declining. Despite the fact that new investments (€13.2m) exceed repayments (€5.5m), the overall portfolio declined as a result of de-commitments (€4.5m) and a combination of revaluations/currency losses/write-offs (in total > €5.0m). 2. Equity investments increased mainly because of 1 contribution to a new fund in Africa whilst guarantees are declining due to run-off in portfolio cooperatives (historic policy decision to exit pre-crop commodity finance). 3. The overall remaining ‘undisbursed’ level relates primarily to investments in funds (capital calls) and investments made in various tranches. (Note that de-commitments typically have no outstandings, hence the decline in ‘undisbursed’.) 4. This reflects overall provisioning level in line with the Investments BU policies. We believe that at 90%, the Portfolio At Risk (PAR) is well covered. 5. Overall, the total outstanding amount decreased to roughly €41m due to the substantial cleanup of the portfolio (see 1). 6. This refers to the undisbursed tranche of equity investments and decreased due to clean up. (This is considered a liability since 2010, in line with the Dutch accounting principles). 7. Capital position of Investments BU at the beginning of the year. 8. Capital contributions (new MFS subsidy and other Cordaid Funds) or subtractions per annum (see notes to the statement of income and expenditure). 9. Retained earnings over the year. See net income P&L. 10. The overhead fee received by the Investments BU is connected to the spending on objectives by the Investments BU. The amount depends on Cordaid’s overall coverage for overhead costs. 11. In summary, based on the Investments BU equity of €84.0m and a maximum commitment level of €51.9m, the Investments BU reserves amounts to €32.1m. The Investments BU is currently (i) implementing an acceleration of investments in RURAF Africa & Latin America; and (ii) establishing various new investment initiatives with other Business Units of Cordaid to invest (a part of) the reserve. The Business Units involved are Healthcare, Entrepreneurship in Fragile States and Urban Matters.

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STATEMENT OF INCOME AND EXPENDITURE 2013 FOR THE INVESTMENTS BUSINESS UNIT

X €1,000 NOTE 2013 2012 2011 ITEM IN CORDAID FS

Financial income Interest income & fees 1 + 2 1,696 1,724 1,904 17 Dividends 1 + 2 0 27 86 Capital gains 3 0 0 0 Income from non-development investments 4 374 1,152 447 18 and cash 2,070 2,903 2,437 Financial expenses Additions Loan Losses 5 715 -38 1,637 17 Revaluation Investments 6 1,032 507 218 17 Currency results 7 2,450 1,148 630 17 4,197 1,617 2,485

Margin on financial activities -2,127 1,286 -48

Operating expenses Staffing direct 8 913 1,194 1,206 10 Staffing indirect 9 829 277 245 10 1,742 1,471 1,451 Financial result from investing activities 10 -3,869 -185 -1,499

Non-operating income Capital contributions 11 6,645 3,832 -1,438 17 Recharged overhead fee 12 595 460 1,094 10 7,240 4,292 -344 Net result Fund Loan & Guarantees 3,371 4,107 -1,843 10

1+2. Interest Income & Fees + Dividends: This item refers to Interest Income on senior/subordinated debt and provision guarantees and fees. The overall level declined slightly compared to 2012, mainly as a result of a decrease in the debt portfolio in 2013. This is offset against a substantial increase in equity in 2013 although the latter does not result in a short and medium-term yield as dividends are usually accrued and are expected to result in an increase in income much later than 2013. 3. Capital Gains: This item relates to capital gains or losses on realized equity exits. No exit was realized in 2013, resulting in no gains or losses. 4 . I ncome non-development investments and cash/cash equivalents: This item refers to income on long and short-term excess liquidity. The income decreased considerably as a result of currency results on non-euro denominated bonds that are held as excess liquidity. 5. Additional loan losses: This item reflects the net addition to the loan losses in the portfolio. The amount stated is the net result of the release of provisions (+€882,000) and the actual impaired loans and guarantees or write-offs (-/-€1,597,000). Provisions are declining as a percentage of the portfolio as the quality of the portfolio is improving. 6. Revaluations Investments: This refers to the annual revaluation of the equity participations. Cordaid Investments values equity participations conservatively, using the lower value of a) acquisition price or b) the value of the Cordaid share as per the end of 2013. 7. Currency results: in 2013, the euro strengthened (in some cases considerably) against nearly every other currency, including the USD. The largest depreciation was in INR (Indian Rupees), to which Cordaid Investments has a significant exposure. 8. Staffing direct: This refers to the total salary costs of Cordaid Investments FTE (=full time equivalent) plus other operational cost (for example travel, training, legal advice and consultancy). The total FTE as per the end of 2013 was 11.89 (average occupancy: 10.05 FTEs). The decrease in comparison to 2012 was the result of a replacement of resources with new staff. 9. Staffing indirect: This refers to the Cordaid corporate overhead costs charged to Cordaid Investments, allocated on the basis of pro rata FTE. The increase in 2013 compared to 2012 is mainly a result of a different distribution of the Cordaid overhead to each individual Business Unit that was introduced and became operational at the beginning of 2013. 10. Net Income: Net Income is negative, which is largely due to a large loss on currency results (refer to note 7). This is below the Cordaid Investments target of beating EUR inflation. 11. Capital Contributions: This refers to the influx of new funds as a result of the commitment of new MFS subsidy projects and other Cordaid funds (CMK). 12. Recharged overhead fee: The overhead fee received by the Investments BU is connected to the spending on objectives and depends on Cordaid’s overall coverage for overhead costs. This fee is integrated as a source of non-operational income to give insight in the financial performance of the BU as if it was a separate fund.

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OTHER INFORMATION

Provision in the constitution governing the appropriation Country offices of balances At the end of 2013 Cordaid had 12 branches in 11 countries. According to article 11.4 of the constitution of Cordaid, the The country offices monitor and/or implement the programs of Supervisory Board adopts the annual accounts drawn up by different Business Units in these countries. The branches are in the Board of Directors. Included in the annual account is a the following countries: proposal for the appropriation of positive or negative financial ▪▪ Burundi balances in the fiscal year concerned. The appropriation of ▪▪ Kenia the balance takes into account the imposed restrictions on ▪▪ Democratic Republic Congo (Kinshasa and Bukavu) spending by third parties. ▪▪ Ethiopia ▪▪ Afghanistan Section 392, subsection 1, Book 2 of the Dutch Civil Code ▪▪ Central African Republic requires a disclosure of the statutory provisions governing the ▪▪ Haiti appropriation of profit. This view should not consist of a single ▪▪ Zimbabwe reference to the relevant articles of the articles of association. ▪▪ South Sudan A literal reproduction of those articles or a summary of their ▪▪ Philippines contents (DAS 420.105) is required. ▪▪ Nigeria

Appropriation of result Subsequent events Included in this annual account is the proposed appropriation Cordaid did not identify any subsequent events affecting the of the positive balance of €4.2m. The appropriation of this annual accounts as presented. positive balance is as follows:

X € 1,000 2013 2012

Appropriation of funds

The balance of funds was appropriated as follows:

Reserves

- continuity reserve 2,331 -1,265

- tangible fixed assets -43 -456 reserve

- earmarked reserves 10,733 0

13,021 -1,721

Funds

- restricted funds 5,152 1,553

- semi-restricted funds -17,301 1,539

- loans & guarantees fund 3,371 4,107

-8,778 7,199

Income from operating activities 4,243 5,478

- transfer of funds to 0 -1,600 Bisschoppe­lijke Vastenaktie NL

4,243 3,878

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INDEPENDENT AUDITORS OPINION

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contact

P.O. Box 16440 2500 BK The Hague

Lutherse Burgwal 10 2512 CB The Hague The Netherlands

+31(0)70-31 36 300 [email protected] www.cordaid.org