ActionAid International Annual Report 2006

Message from the Treasurer

In 2006, ActionAid income increased by 7% to €178.1 million. Allowing for lower emergency income following the huge response to the Indian Ocean tsunami in 2005, this represents an underlying increase of 12% for our long-term development and policy advocacy work.

The work that we do with poor people and their organisations is only possible because of the continued support of individuals throughout Europe. Our 400,000 committed givers represent an important element of our legitimacy, making it harder for governments to ignore our messages, and give us an important degree of flexibility to respond to the needs and priorities of poor people, wherever they arise. While the greatest number of our sponsors and individual supporters are from the UK, Italy made great progress during the year in increasing supporter numbers and income by around 30%. This was largely a result of their involvement in a television series encouraging viewers to become child sponsors.

Twenty five percent of our income comes from other donations, including €16.6 million from the UK Disasters Emergencies Committee (DEC) for our work in the countries affected by the 2004 tsunami and the 2005 South Asian earthquake. Other donations from trusts, foundations and companies almost doubled, boosted by funding from the Bill and Melinda Gates Foundation for health advocacy work in Europe.

Income from official sources, governments and multi-lateral institutions remained static, which was disappointing. We expect recent investment of efforts to lead to the winning of more of these grants and contracts and higher income in future.

In 2006, we saw the first gross income contribution from our new associate in Sweden. We are very encouraged by the potential to engage new supporters and donors in Europe, as well as in India, Brazil and the US and we will be devoting more resources to this in the coming years.

Programme expenditure increased by 9% to €123.2 million. €25.4 million of this was spent on emergency projects. It is always our aim to ensure that as much as possible goes directly to our programme activities. Our support costs increased by 14% to €28.8 million. We expect support cost ratios in individual countries to fall as new country programmes consolidate their operations, but we expect governance costs to continue to increase as more of these programmes establish their own national Boards in the run-up to becoming ActionAid affiliates. We will be rigorous in ensuring that support and governance activities enhance our effectiveness sufficiently to justify these costs.

Overall fundraising costs represent 15% of our income, up from 13% in 2005. It cost us more to raise our income in 2006, largely because it is sadly more difficult and therefore more expensive to raise money for long-term development work than it is for emergencies.

More details on our financial performance last year are given in the Review of financial performance. We are presenting our accounts for the first time under IFRS (International Financial Reporting Standards), which we believe represent the most appropriate way to account at an aggregate level for operations as diverse as ActionAid’s.

We strive to be fully accountable to everyone who donates money to ActionAid by showing where and how it is spent. Significant improvements in accountability were made by a number of country programmes which shared their financial information with their partners, communities and the public, in turn encouraging our partners to be more financially accountable. The programmes which we support and the campaigns which we undertake are making a significant impact on poverty in many countries around the world, and we thank all our supporters for the trust and support that they put in ActionAid. Our challenge, as ever, is to become more effective in securing the changes to underlying policies and practices which perpetuate poverty and injustice.

Frank Kirwan
Treasurer of the Board of Trustees
ActionAid International

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