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Putting children first
Focus on child well-being
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2009
Annual Report
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2009 Financial Overview
Charlie Fluit, C.A.
Chief Financial Officer
Introduction
This annual report and financial overview covers World Vision Canada’s 2009 fiscal year, October 1, 2008 to September 30, 2009.
During this time, Canada experienced the significant global economic downturn, including unprecedented turmoil and uncertainty in the financial sector and recession in Canada and elsewhere. Canadian charities had to adapt to this rapid change in the economic climate, which presented challenges to resource acquisition and donor retention.
At World Vision, our leadership team responded to the crisis by preparing several revenue stream scenarios and identifying contingency actions. We carefully monitored our operations, reduced discretionary spending, and delayed many new hires and projects. Our priorities were to maintain retain critical commitments to our international programs, support our existing staff team, and invest in enhancements to our fundraising to maintain the revenue necessary to support our programs.
We are grateful that despite the economic downturn, the majority of our donors continued their faithful support. In 2009 we were able to meet our program commitments helping children, families and communities around the world.
About World Vision
World Vision Canada’s head office is in Mississauga, Ontario, with smaller offices in Montreal, Ottawa and elsewhere in Canada. We are incorporated under the laws of Canada as a corporation without share capital and are a non-profit charitable organization (registration number 1193 04855 RR0001). World Vision Canada files a publically accessible annual information return (T3010) with the Canada Revenue Agency Charities Directorate.
We accomplish our program work both on our own and in partnership with local communities through World Vision organizations around the world. World Vision functions as a partnership of interdependent national offices in more than 90 countries. A common mission statement, shared core values and common policies and standards bind the partnership together. National offices hold each other accountable through an ongoing system of audit and peer review.
World Vision International, our global coordinating body, assists by facilitating the coordination, implementation and monitoring of overseas programs, as well as providing strategy and technical expertise, to ensure that goods and projects funded by World Vision donors are used to effectively benefit people in need.
Financial Highlights
World Vision’s financial statements outline the results of our activities in the Statement of Revenue & Expenditures, as well as our Financial Position as at September 30, 2009. The financial statements in this online annual report are summarized. Copies of the complete audited financial statements are available from our website here, or by calling 1-800-268-4888.
The comments below refer to the summarized statements of Financial Position and Revenue & Expenditures except where noted.
Revenue
Despite the very challenging economic environment, in 2009 our total revenue declined by only 2%. We are grateful for such a strong result, and for the faithfulness of our generous supporters.
Donations from the Public
- Cash donations include revenue from two sources: child sponsorship, our ongoing monthly pledge program supporting community development; and non-sponsorship revenue, generally single gifts, donated through sources like direct mail for development or emergency relief, our Gift Catalogue, 30 Hour Famine, planned giving, and special events. Child sponsorship donations comprise over 51% of our total revenue. In a very tough economic climate, our sponsors remained committed and revenue attributed to sponsorship increased by 2.6% over 2008. Non-sponsorship revenue declined 8.9% due largely—and thankfully— to the lack of a high-profile humanitarian emergency or natural disaster as there was in 2008. The remainder of the decrease is attributable to the impact of the economic crisis.
- Donated goods are gifts-in-kind given to World Vision. These donations come from a range of North American organizations, and in 2009 included pharmaceuticals, educational materials and clothing. Due to economic conditions and changes in products received, this revenue source decreased from $72.2 million in 2008 to $62.5 million.
Government Grants
- Canadian Government cash includes grants from the Canadian International Development Agency (CIDA) and other departments. These amounts came in at $13.3 million, down from $15.6 million. This decline was due in part to the successful completion during 2009 of a large, multi-year CIDA-funded project.
- Donated goods are food commodities from the United Nations World Food Programme. These increased in the past year from $29.5 million in 2008 to $35.5 million due to increased volumes and a favourable foreign exchange rate.
Investment and other
- Investment and other income declined in the year from $2.8 million to $1.6 million due to lower interest rates and the hosting of fewer fundraising events.
Expenditures
Programs
In 2009, 81.2% of our revenue supported programs that combat poverty and help children and communities in need. More information on how our program dollars were spent this year is available here.
- International programs expenditures decreased to $294.1 million, principally reflecting lower revenues. Additionally, when comparing this expense category year over year, note that in 2008 we made a one-time, $5 million funding out of unrestricted reserves which increased that year’s international program expenditures. That expenditure reduced cash balances and resulted in a significant excess of expenditures over revenue that year.
- Canadian programs expenditures were down marginally as projects being completed were not immediately replaced.
- Public awareness and education expenditures decreased from $7 million to $5.7 million due to a decrease in expenses relating to printed publications such as Childview magazine and a shift in organizational emphasis to increased fundraising to maintain critical income for program work, which was part of our strategy to respond to the economic crisis.
Support costs (fundraising and administration)
Overall, support costs increased by only 1.9% and comprised 18.8% of total revenues, well below under our organization target. This percentage represents a balance between the need for stewardship and programmatic impact against the need for investment in future resources through more effective fundraising.
- Fundraising expenditures increased 3.3% to $47.6 million due to increased costs and investment in fundraising in a difficult environment.
- Administration costs decreased by 0.9% to $22.7 million as we responded to the economic crisis by reducing discretionary expenses.
Overall, the $1 million deficiency of revenue over expenses shown in the Summarized Statement of Revenue & Expenditures is attributable to the timing of program expenditures, and represents less than 0.3% of total revenue.
Cash balances
Short-term investments declined to zero as all funds were kept in cash at year-end as there was no differential in the interest rate. As the Summarized Statement of Financial Position shows, the combined cash balances increased from $33.9 million in 2008 to $36.9 million in 2009 due largely to the timing of program expenditures. A full $27.6 million of this cash is designated to specific programs, with the balance being available to support both program and cash flow requirements.
Executive compensation
Information on World Vision’s approach to executive compensation may be found here.
Management responsibility for financial reporting
Management and World Vision Canada’s independent Board of Directors are responsible for the financial statements and all other information included in this annual report. The financial statements have been prepared in accordance with Canadian generally accepted accounting principles for not-for-profit organizations as established by the Accounting Standards Board of the Canadian Institute of Chartered Accountants, and, where appropriate, include amounts based on management’s best estimates and judgments.
The preparation of financial information is an integral part of the ongoing management of the organization. Management has developed and maintains financial and management controls, information systems and management practices to provide reasonable assurance that financial information is objective and reliable, and that the organization’s assets are safeguarded.
The Board of Directors, comprised of non-management volunteers, approves and has overall responsibility for the financial statements. It is assisted by the Audit Committee, which meets regularly with management as well as internal and external auditors to help review internal controls and financial statements and auditors’ report.
The Membership of the organization appoints the auditors, based on a recommendation from the Board of Directors. The financial statements have been audited by external auditors KPMG LLP, Chartered Accountants. Their report outlines the scope of KPMG’s examination as well as their opinion on the financial statements.
Accountability
In addition to scrutiny by our Board of Directors, and internal and external auditors, our finances and operations are regularly peer-reviewed by our World Vision Partnership.
We also seek external accountability. The Better Business Bureau has granted World Vision status as a national “Accredited Charity” with an A+ rating. We voluntarily ascribe to several external bodies which include ethical codes for fundraising and transparency, including the Canadian Council of Christian Charities, the Imagine Canada Ethical Code Program, and the Canadian Council for International Cooperation.
World Vision Canada is committed to the highest standards of financial and ethical accountability in our accounting, our fundraising, our communications and our programs.
Charlie Fluit, C.A.
Chief Financial Officer
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