Financial Management
As a non-profit organization TNI is primarily (94%) dependent on grant income. The largest proportion of TNI funding continued to be that received from the Dutch Ministry of Trade and Development, representing nearly half of TNI’s income. The dependence ratio is relatively low for those which receive funding from this source, and well below the ceiling of 75% set by the Ministry. TNI has made major efforts to ensure its funding base is as diverse as possible to spread the risk should one of the major grants not be renewed.
In 2019, we booked some success in increasing foundation support for TNI by 3% on the previous year, now accounting for 21% of TNI’s funding base. We have also sought to increase ‘own income’ through community-building efforts since 2018. We saw a 108% increase in monies raised through these efforts in 2019, as compared to the previous year. TNI also increased the proportion of income coming from European Union grants by 2%, winning three new grants in 2019.
| Source | Specification | % of total income in 2018 | % of total income in 2019 |
|---|---|---|---|
| Dutch government | Netherlands Ministry of Trade & Development | 48% | 49% |
| Other public sources | Swedish International Development Agency; Swiss Development Cooperation; GIZ; Irish Research Council | 25% | 19% |
| Philanthropic foundations | Foundation Open Society Institute (New York & Switzerland); Foundation Open Society Policy Centre; Open Society Initiative for Europe; Open Society Initiative for Southern Africa; Funders for Fair Trade; Rockefeller Bros Fund; Schöpflin Stiftung | 18% | 21% |
| European Union | Development Education and Awareness-Raising; Justice and Home Affairs; Erasmus; H2020 | 5% | 7% |
| Own means | Rental, book sales, donations, currency gains, interest | 3% | 3% |
| Other income | Sub-contracts | 1% | 1% |
Taxes
For tax purposes, TNI operates with fiscal number 0034.74.082. It pays taxes on salaries. TNI is not considered an enterprise and as such is exempt from VAT. TNI is acknowledged by the Dutch tax authorities as an organization that works for the general interest (ANBI: Algemeen Nut Beogende Instelling). This allows those who make donations to TNI to qualify for tax rebates within the European Union.
TNI has long been formally recognized as holding the equivalent of 501 (c) status in the USA, which status is reconfirmed annually with a certificate from NGO Source which may be used by those funders that are members of NGO Source.
In 2019, TNI sought the advice of a fiscalist on whether it would be considered liable for corporate tax on the basis of the surpluses it has generated annually. The conclusion of the fiscalist, subsequently confirmed by the Dutch tax authorities, is that TNI legitimately earns these modest surpluses, relative to total budget, which are not considered profit and are not liable to corporate tax. The sources of these surpluses include donations, contributions to jointly organized activities, book sales, renting of office space, and eventual settlement of longstanding debts owed TNI that had been written off.
Expenditure and Procurement
TNI spent 78% of its income in 2019 on programme implementation,10% on administration and fundraising, and 12% on infrastructure (office and communications, building).
TNI raises grants for projects developed under our seven programme areas. Myanmar is our largest and only country-focused programme. It is able to draw on the expertise of many of the other programmes. Indeed, there is a lot of collaboration across TNI programmes as many of the issues covered are inter-connected. The programmatic divisions correlate with co-ordination structures and distinguish main umbrella fields.
Financial result 2019
The result in 2019 was a modest Euro 649 once funds raised through crowdfunding for a campaign were deducted for reservation in a restricted fund. TNI’s continuity reserves, at the end of 2019, stood at Euro 1.174.321. A major goal set by the Supervisory Board has been to increase TNI’s survival ratio (reserves/fixed costs x 365) to at least 180 days or 6 months. By the end of 2019, this was achieved – with the survival ratio standing at 225 days.
The ratio of current assets to short-term liabilities remains healthy at 153% (compared to 140% in 2018).
