Given everything that is happening at Fairfood, as seen in the previous chapters, you may expect our organisation to be growing. As we like to be frank, growth is not as fast as we would want, but we indeed see the size of the organisation growing, as are our partnerships, our team and our financial numbers.
We feel that being transparent about our own practices is as important as food businesses being transparent about theirs, which is why the financial statements in the next chapter hold every financial detail you may wish to see – from our director’s salary to the budgets of our projects and the rent of the office. One thing you may find, is that our income has grown to over €1,2 million. For 2022, we have budgeted an income of 1,6 million.
The positive result of 2021 amounted to €152,049 and has been added to the General Reserve. This General Reserve amounted to €512,814 by the end of 2021 – a solid basis for further growth and for taking well-considered risks.
How will we grow, you ask? As in previous years, our fundraising in 2022 focusses on: 1. Multi-year public-private partnerships; 2. Grants; 3. Services to agri-food companies and 4. Project contributions and licences to use and further develop our tools. Internally, we monitor the finances monthly, both on project level and organisation wide.
During the writing of this annual report, the majority of the benefits for 2022 were already approved by the different parties involved.Download our budget 2022 here
At Fairfood we work on the basis of trust. Our management and Supervisory Board serve as the guardians of this trust. Fairfood is transparent about its business operations and strives for the most effective use of resources – each euro spent, every hour worked is accounted for. Risk management is essential to us because we’re all too aware that economic conditions can change, politics can be unstable, and markets can be volatile. The corona pandemic is causing us to be extra alert.
Fairfood has zero tolerance for fraud and corruption, meaning that our staff members, all non-staff persons associated with Fairfood, suppliers of goods and services, implementing partners and other responsible parties contracted by Fairfood are not to engage in fraud or corruption.
Our multi-annual strategic and financial plan is aimed towards long-term partnerships and funds that deal with technological applications, such as blockchain, artificial intelligence, and the Internet of Things. First and foremost, we value the partnerships we enter into with companies and organisations that wish to contribute to a sustainable food system – see Chapter 3 for examples of these partnerships.
OUR MAIN RISKS
1. Reputational damage, for example resulting from partnerships with companies. Fairfood has internal guidelines for non-disclosure agreements (NDAs) and Memoranda of Understanding (MoUs) with companies.
2. The effects of COVID-19 on achieving our objectives, but also on the wellbeing of local organisations, and the farmers and food workers we work with.
3. Illegitimate use of grant funds, which requires repayment obligations to donors. The budget is approved by our Director and the segregation of duties in the project management is appropriate. With large grants, the suitability of expenditure is investigated by an external auditor.
4. The unpredictability of government policies. Political decision-making, and the availability of funding, are difficult to predict, as are the political forces that influence partner organisations. Fairfood collaborates with other NGOs and lobby organisations Partos and MVO Platform to influence political decision-making through smart lobbying and advocacy.
RISK MANAGEMENT AND CONTROL SYSTEMS
Fairfood manages risks at organisational, programme and project level. Risks are assessed and response measures taken and monitored to mitigate and/or absorb the impact of a risk. Internal control procedures are in place to mitigate and/or absorb financial risks relating to potential misuse of funds (i.e. due to corruption, fraud, or theft), as well as for receiving, allocating and the payment of funds. Financial management follows a low-risk strategy, reserving funds for investment risks and potential losses.
Fairfood is committed to transparency and the effective deployment of resources. It monitors project progress and the use of funds with a project control system. Operations are audited internally and externally, and outcomes are discussed with the management and the Supervisory Board. As a learning organisation, Fairfood strives for continuous improvement.
As a member of Partos, the trade association for development cooperation, we comply with Partos’ Code of Conduct. Fairfood has an integrity policy in place. Read more about this in Chapter 1.