Risks

The added value provided by the board lies primarily in its supervision of daily operations, including monitoring overall goals and any risks Net4kids must take into account.

While the majority of these risks is addressed within the framework of day-to-day operations, it is a good idea to provide an overview in the annual report:

Organisational continuity
Of the 36 employees who work for Net4kids, five receive (partial) remuneration. The stability and continuity of the organisation is therefore dependent on the willingness of volunteers. Strengthening the organisation structurally and scalably is crucial, while keeping costs as low as possible and maintaining the organisation's innovative character. Greater use of paid employees is unavoidable.
This also increases the need for finding organisational sponsors. After all, the objective is to have the organisation finance itself entirely through returns on capital and organisational sponsorship, thereby ensuring its continuity.

Financial continuity
Net4kids Aid Foundation does not run any projects itself, but cooperates with existing aid organisations to this end. These partners are often smaller, local organisations without large grassroots support or financial reserves. Therefore, in selected cases Net4kids makes advance financial commitments to selected project organisations in order to allow them plan work, enter into agreements and safeguard project continuity. These commitments are given based on estimated income on the one hand and available continuity capital on the other. By spreading guarantees and phased introduction of new projects, it is possible to precisely tailor commitments to developments in income.

For 2008 and the following years, the total project commitments made amount to € 445,164. This sum is covered by € 29,500 in received donation commitments and € 301,662 in advance donations. Providing guarantees is always a risk. Given these commitments and advance donations, the high degree of continued donation and the available capital in the Net4kids Continuity Fund, the board does not feel there is any danger of not being able to meet the commitments agreed to.

The capital in the Net4kids Continuity Fund is also used to safeguard the continuity of the organisation itself. De state of the freely available own capital of € 1,064,259, the average coupon interest returns, and the current annual out of pocket expenses of € 128,182, are currently no reason for worries about continuity.

As donations grow, however, demands on our guarantee fund will grow. Structural cover of operating costs is important to prevent further loss of capital. Additionally, the capital in the Continuity Fund may need to be increased in the future. The board does not see the need for this in the short term.

Regulatory pressures
Transparency and accountability are central to the Net4kids model. Donors are regularly updated on the progress of their projects. Reporting on the organisation and all its activities is the most important form of accountability towards organisation sponsors and other stakeholders.

There are now numerous guidelines for best practices and reporting for the sector. We strive to adhere to these guidelines wherever possible. Noblesse oblige. The danger remains that fulfilling the requirements becomes an end in itself, requiring more time to be spent on compliance than achieving our original goal: helping as many underprivileged children as possible. In order to decrease the pressure on the organisation, for example, we had to make the decision to publish our annual report later and not take part in the Transparency Award. These are real-world decisions that need to be made, but ones that go against the grain of our sense of professionalism.