Annual Financial Report – 2007

Expenses

Note: This surplus is mostly due to the lack of a major building project and to the intention of funding certain programs with an ongoing endowment in 2009

All financial accounts are available for inspection by any party with a legitimate interest.

2007 - Overview

2007 was a year of consolidation and concentration. Our scholarship students provided us with many successes and also some crises. An unexpected pregnancy and two involvements in petty crime were some of the setbacks. Some students are growing up to be stars; others make poor choices. All have been equipped with an education that would not have been available to them and all understand that it is that education which empowers them with choice. Our concentration has moved to supporting activities which benefit the community as a whole - at least those members of the community who want to take advantage of the opportunities presented.

The library has become the center for learning in the community and Sue Alexander, the Senior Librarian, has continued to innovate with new programs and attract new volunteers. More volunteers from the surrounding communities found the library a “safe space” to come and give their time to help young people needing extra assistance in their studies. In the library we struggled to find the right formula for our computer training programs. We are more confident, as we enter 2008, that we understand better what will be the most popular approach to these classes which are designed to help people become more employable.

The sports program did well with their teams and is increasingly appreciated by the students, their parents and the community. A major task in 2008 is to find out how to make both the school and community sports programs self-sustaining.
Our building program ran into real trouble. The cost of construction went up considerably (partly because of the construction demands of the World Cup to be held in South Africa in 2010) and bank interest rates have increased.

But the biggest obstacle we face in our building program is a law which decrees that no home loans may be given by banks unless both builder and building are NHBRC approved. Such approval demands a specification which places the home beyond the affordability of township dwellers. We are struggling to change the specification so banks will finance the kind of owner-occupied multi-unit structure we built two years ago with our own money.

Looking forward to 2008

We have set ourselves the goal of making our programs self-sustaining by 2009. This means they must have both the management and the funding to continue without us. It does not mean that we abandon Masiphumelele; rather, it means that we aim to leave a legacy that will survive us. The creche is in Doreen’s capable hands; sports will be divided into the after-school and community programs. We will focus on the library and its programs for the community instead of scholarships for individuals. The challenges for 2008 are already a work-in-progress as we shift our concentration to self-sustainability. We may not succeed in some of our objectives; for example the NHBRC may kill our program for bank-financed owner-occupied multi-unit buildings. But our purpose is clear and understood by those with whom we work.

Loan payments of $16,056 were made by our homeowners and $3,748 by recipients of other loans. We had some loan write-offs associated with a policy change on fees for computer classes.

Many of our homeowners struggle to make the monthly interest-free payment and when they are “between jobs” our policy is lenient. However where there is suspicion that they are making insufficient effort to fulfil their obligations, we take them to court with the threat of eviction. When we do this we notice that payments quickly resume - not only from the defaulters but from others who hear about the action. We have never had to evict anyone - yet.

Donations in 2007 set a record high - except for the year we built the library extension. We attribute some of this to our December newsletter in which we, uncharacteristically, asked for year-end contributions. But there were also a number of generous donations from first-time givers who had simply heard of what we were doing. The Episcopal Diocese of New Hampshire included us in their Outreach giving as a way of supporting the Millennium Development Goals; several churches in the diocese followed.

Expenses

Education $53,993

College Scholars ($13,072) In 2007, we supported:

• Two students on a three year program in Cape Town where we pay both fees and residence and two students at a one-year college
• One student whose scholarship was terminated when she became pregnant (a condition of the scholarship agreement); a loan from us enabled her to finish college.

We also offer a free school uniform to any youngster at the Ukhanyo Primary School whose parents cannot afford to buy one. We started this program in 2005 after a large shack fire deprived hundreds of families of everything they owned. This program covered nearly a hundred children in 2007 and cost $1,446.

Creche expense ($5,682)

The creche (day care center) we built in 2001 is self-sustaining under the management of Doreen Zanyiwe. Each year we make a contribution to an endowment fund we have set up. Doreen withdraws the interest to help pay for children whose parents are too poor to pay the creche fees. She does not touch the principal.

Library Programs ($11,318)

Library Support ($7,880) includes funds provided to the Library which we we built in 2003 and extended in 2005. We do this to supplement the City’s funds so that the library can be open every weekday and Saturday mornings. This creates local jobs and several programs are run by volunteers
- for children at pre-primary schools,
- for mothers and toddlers (a lapsit program)
- for students who need help with  homework
- for those who need help with the computers installed in the library for internet access.
- for children in grades 1-3 who need reading and writing assistance.

Computer teaching ($3,438). Upstairs in the library we have installed computers to create a computer training room. Courses are offered which enable those with no computer skills to gain some literacy and thereby become more employable. We have had a high dropout rate which we do not yet understand and have re-launched the program in early 2008 with a revised curriculum which focuses less on skills and more on practical needs (how to write a resume, how to look for a job on the internet, how to use email etc). The teachers are volunteers and a service contract has been signed to make sure the computers are always in working order.

The library has become a center for learning. It is a place to borrow books, read and be read to, to do homework, to gain extra help from volunteers, to learn computer skills to look for a job in the newspaper or on the internet, to learn parenting skills, to play chess and many other activities.

Community Projects ( $6,233)

Project Management ($2,095). Elize Taylor, our Director of Operations, collects the loan payments, provides financial counseling, makes small business loans, buys bus and train tickets for scholarship students and acts as paymaster for all our programs.

Other community projects ($3,357) include support of the Youth Pastor at the Baptist Church. Sonwabo was on a MasiCorp scholarship while he was at Seminary and now provides an invaluable service to the young people of the community. He was suddenly put in a position of great responsibility when the previous pastor of the Church was shot in January 2007 and the Church was unable to support all of his stipend. He runs evening sessions for young adults and teen-agers and coaches a boys’ soccer team as part of his pastoral work.

Building and Park Maintenance ($781) includes paying a part time caretaker to water the park, keep it free of litter and minimize wear and tear by preventing children from playing soccer there.

Marketing and Travel $15,578

Very little money is spent on fundraising. Most of the money in this category is the cost of round trip (business class) fares for the founders. This cost is covered by the Founders’ contribution, but included in the books of the corporation