Annual report 2023: Financial statements -

The Management Board of Stichting Fairfood International (Fairfood) hereby presents the financial statements for the financial year ended December 31, 2023. The financial statements have been prepared in accordance with Dutch Accounting Guidelines for Annual Reporting – RJ 640 for not-for-profit organizations.

Management board report

The Management Board of Fairfood in 2023 was formed by Sander de Jong (Managing Director). The Supervisory Board was composed of H.I.J. Bruggeman (Chair of the Supervisory Board), W.P.Gorter (member of the Supervisory Board), P.C.D. Goudswaard (member of the Supervisory Board), M. Zwart (member of the Supervisory Board) and H. de Groot (member of theSupervisory Board). The Supervisory Board had a meeting to approve the annual report for 2023 and the outlook for 2024 was also discussed.

In 2023, Fairfood faced some financial challenges; the year-end balance sheet shows a marked decrease in total assets, from €1,418,586 in 2022 to €739,235 in 2023. This decline was primarily due to reductions in both fixed and current assets. Tangible fixed assets, including office inventory and hardware, were valued at €6,826, down from €9,029 the previous year. Current assets also saw a decrease, with inventory, receivables, and cash equivalents totalling €732,410, compared to €1,409,557 in 2022.

Income and Expenses

Fairfood’s total income for 2023 amounted to €1,349,939, which fell short of the budgeted €1,589,362. The income was largely derived from contributions by third parties (€1,030,709), governmental contributions (€319,230), and other minor sources. The Dutch Postcode Lottery, which has been financing Fairfood for many years, ended their contribution in 2023, resulting in a decrease in income of €500,000 compared to 2022. Governmental contributions increased substantially from €15,163 in 2022 to €319,230 in 2023, highlighting successful grant applications and partnerships, particularly with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

On the expense side, Fairfood’s costs arrived at €1,686,488, lower than the budgeted €1,713,612. Major expenses included staff costs (€870,414), project platform costs (€210,540), and communication (€99,688). Staff costs, which covered salaries, social expenses, and other personnel-related costs, reflected an increase due to the average Full-Time Equivalent (FTE) rising from 9.40 in 2022 to 10.67 in 2023. Communication expenses included significant Google advertisements (in kind) aligning with Fairfood’s strategic emphasis on digital outreach and visibility.

Operational Result and Financial Health

The organisation recorded an operational deficit of €336,549, a stark contrast to the surplus of €167,445 in 2022. After accounting for financial income and expenses, the net result was a deficit of €335,144. This outcome underscores the financial strain experienced during the year, necessitating careful financial planning and management going forward.

Cash Flow and Liquidity

Fairfood’s cash flow statement for 2023 reveals a significant outflow, resulting in a net cash flow decrease of €680,219. The year commenced with a cash balance of €1,295,742, which decreased to €615,522 by year-end. Cash flows from operating activities were negative, primarily due to movements in working capital, including increases in receivables and decreases in liabilities. No substantial investments were made during the year, reflecting a conservative approach to capital expenditure amidst financial constraints.

Current Liabilities and Commitments

As of December 31, 2023, Fairfood’s current liabilities amounted to €396,852, down from €741,059 in 2022. These liabilities included creditors, other liabilities such as audit costs and tech development costs, and project funds received in advance. The latter primarily comprised funds from Solidaridad for the Dream Fund project and GIZ for the aGROWforests project.

Conclusion

The financial performance of Fairfood in 2023 highlights the organisation’s adaptability and resilience in the face of fiscal challenges. Despite recording a deficit, the organization effectively managed its cash flows and liabilities, ensuring operational continuity. Moving forward, strategic financial planning will be crucial to restoring balance and achieving long-term sustainability. The budget for 2024 is also included in the finance chapter. Fairfood’s commitment to transparency and rigorous financial oversight will support its mission to promote sustainable food systems and drive positive change in the global food industry.

Chapter 5: Financial statements