Policy on assets and investments
Solidaridad spends € 20 million on financing projects. These funds come from many different sources, including government contributions as well as donations from individuals, companies and institutions. Solidaridad has a continuity reserve of € 3.3 million to cover any unexpected large fall in income. If funding is received and cannot immediately be usefully deployed in support of Solidaridad’s objectives, since it takes time to prepare and implement projects, these funds are temporarily invested. Solidaridad’s partners, suppliers and staff need to be sure that Solidaridad will always be able to meet its liabilities and donors and other funding bodies must be confident that the money they donate to Solidaridad is in safe hands. It is therefore extremely important that Solidaridad’s assets are managed responsibly. Investment rules have been drawn up to ensure that this is the case. These rules also stipulate that Solidaridad will comply with the Guidelines Financial Management for Charity Organizations prepared by the Dutch Association of Fundraising Organizations. In view of the limited volume and complexity of the portfolio, Solidaridad has decided to manage its assets internally to reduce costs. By far most of the asset buffer is invested in savings deposits with socially responsible banks, such as ASN Bank and Triodos Bank.
The continuity reserve is intended to cover short-term risks and to ensure that Solidaridad can continue to meet its moral and other obligations. Solidaridad bases itself on the concept of sustainable relationships with its partners and with its staff. The size of the continuity reserve is determined as a trade-off between the desirability of deploying as much as possible of our resources for our objectives and the need to maintain a healthy financial basis for the future. We are guided in this decision by the
Guidelines Financial Management for Charity Organizations prepared by the Dutch Association of Fundraising Organizations. The Guidelines state that:
- a reservation of resources is desirable for the continuity of the support given to the charity’s goals;
- the continuity reserve should be no more than 1.5 times the annual costs of maintaining the operational structure.
The costs for maintaining Solidaridad’s operational structure in 2015 were € 3,203,073 (2014: € 3,060,637). At the end of 2015, the continuity reserve amounted to
€ 3,262,269, i.e. 1.0 times the annual costs of maintaining the operational structure (in 2014: 0.9).