click here - Stichting Weeshuis Sri Lanka

RISK MANAGEMENTFinancial risksFrom the start of the project the Sri Lanka Orphanage Foundation has depended primarily on sponsors for funding.Fundraising is the most important responsibility of the Board. The willingness to donate money for tsunami projects isdecreasing yearly. Even so for the foundation the income of donations is diminishing yearly. In order to be able toguarantee the continuity of the project for the next period of 14 years, the foundation needs at least 6.3 million Euro, ofwhich a total of more 3.6 million Eurohas so far been collected.The foundation has many private contributors who donate monthly. In 2007 private donations made up 32% of theincome of donations (monthly standing orders and deposits), again an increase compared to previous years. The SriLanka Orphanage Foundation tries to keep this target group of private contributors committed to the project by offeringvarious fundraising activities, such as webshop, financial adoption plan, selling books and calendars, a “ friend of theorphanage trip”. To maintain the relationship with our loyal contributors the foundation regularly communicates about thelatest news by sending this group electronic newsletters.The fundraising activities aimed at corparate sponsors have been successful as well in 2007. This target groupcontributes 28% of the income out of donations. The goal is to increase this share in the next years.The assets of the foundation are administered in deposit accounts in order to receive the highest revenue without risk. Inorder to eliminate all risk the foundation does not invest money in shares or stocks nor invests in other high risk options.Investments and project commitments are made only using freely available assets. With regards to the freely availableassets, the successful fundraising of the past three years and the permanent and structural involvement of thecontributors the Sri Lanka Orphanage Foundation expects to fulfil the continuity of the agreements.The risk of fraud is very small and sponsors can therefore be assured that their donations will be spent in the right wayon the project only. The risk of fraud is limited, because the Dutch organisation is closely linked with the partnerorganisation in Sri Lanka, the Trust. Also Board members and professionals travel to Sri Lanka on a regular basis tokeep an eye on the project. Architects of Dutch consultancy firm Twijnstra Gudde, accountant firm Deloitte and membersof the Supervisory Board travel several times a year to Sri Lanka on their own expenses to inspect all expenses andinvestments. All tenders for the building of new pavilions or medical post is specified in a Bill of Quantities and as soonas a building has been finished Twijnstra Gudde verifies the quotations and use of materials. Also the project isinspected by the CBF(Central Bureau of Fundraising) and accountant firm Deloitte in the Netherlands and Sri Lanka.Political and safety risksOn 31 July 2006 the LTTE rebels, the Tamil Tigers, declared that the 4-year-old cease-fire with the Sri Lankangovernment was over. This cease-fire did not really exist anymore since in the beginning of 2006 there was an increasein violence between the Tamil Tigers and the Sri Lankan government. The negative consequences of this violent civil warcan mainly be felt in the north eastern districts. The orphanage is located far from the main centre of violence and therehave not been any unsafe situations for the children or staff. It is likely that the violence will continue for a while.The foundation has close ties with the local authorities and the Dutch embassy in Sri Lanka. This reliable network ofinformation will enable us to take measures quickly if necessary.Operational risksIn order to limit safety risks for the children and staff of the orphanage, measures were carried out concerning fire safety,hygiene and health precautions. We have a fire protocol and of course fire extinguishers in all the buildings. Also the staffreceived training on the above mentioned subjects. All children were vaccinated.A security post was build near the entrance of the premises to secure the safety of the children. In order to guarantee thecontinuity of all facilities extra staff was recruited to have a back up, for example in case of illness of one of the teachers.For all employees a fund was established with which, for example, disability allowances can be paid. In 2008 a crisis planwill be developed and implemented.Organisational continuityThe Sri Lanka Orphanage Foundation is managed by volunteers only. The stability and continuity of the Dutchfundraising organisation depends strongly on the quality and devotion of these volunteers, together with professionalsupport from corporate organisations. At the end of 2007 it was agreed that the Supervisory Board will evaluate theBoard on matters of continuity and governing management. In 2008 the Supervisory Board will advise on improvementoptions.51