HISTORY 3. AbOuT THe ROmAnIAn-AmeRIcAn FOunDATIOn 4. PROGRAmS 8. InDePenDenT AuDITOR S RePORT 13. WHO We ARe 19

Transcription

1 October - December

2 CONTENTS PAGE HISTORY 3 AbOuT THe ROmAnIAn-AmeRIcAn FOunDATIOn 4 PROGRAmS 8 InDePenDenT AuDITOR S RePORT 13 WHO We ARe 19

3 What wi the Romanian-American Foundation contribute to Romania, you may ask? First, you shoud be aware that the Foundation is a gift a gift from the American peope to the Romanian peope. Secondy, it is a gift in perpetuity. There are no pans to withdraw the funds at any time in the future. Thirdy, the Foundation intends to concentrate many of our funds on programs in sma towns and rura areas, which ack the educationa, technoogica and deveopmenta toos that they need to compete effectivey in the 21 st century. Fourthy, in working with the non-profit sector in Romania, we intend to adapt and appy business methodoogies and practices that have proven effective in growing American sma businesses and sef-sustainabe non-profit institutions. And ast but not east, we expect to become known for working cosey with partners for profit, not for profit and governmenta institutions in deveoping and pioting programmatic soutions to generay recognized probems in Romanian society. Our objective wi be to initiate programs, which, if proven successfu, can be repicated on a arger scae to increase the prosperity and we being of the Romanian peope. The Foundation is run by a superb, core staff, but they wi be too few in number to manage a our programs in the fied on a daiy basis. Rather, we wi rey on Program managers, organizations with strong eadership and proven track records, to operate our programs in areas where they have demonstrated expertise. During our first three months of operation, the Foundation is off to a rousing start. At its first two meetings, the Foundation board of Trustees approved four programs. A these programs aim to encourage entrepreneuria attitudes and promote entrepreneuria ventures among the recipient popuations. You can anticipate more groundbreaking programs in the coming years. If we succeed in combining American optimistic, can-do attitudes with Romanian skis, ingenuity and creativity, there is no imit to what we can accompish together. Ida Schmertz, chair of the RAF s board of Trustees 2

4 History Romanian-American Foundation finances its activities from revenues generated by its endowment, a egacy of the Romanian-American enterprise Fund (RAeF). The Foundation is a gift from the American peope to the Romanian peope, with an endowment of approximatey $150 miion. RAeF was funded in 1994 by the united States Government through the u.s. Agency for Internationa Deveopment. This pubic-private partnership pioneered a combination of investment and deveopment activities that proved very successfu in the Romanian market pace. Over the years, RAeF succeeded in everaging its capita by attracting as partners notabe internationa financia institutions such as the european bank for Reconstruction and Deveopment, the Internationa Finance corporation, DeG and FmO and the back Sea Trade and Deveopment bank. RAeF accompishments incude estabishing the first micro oan program in Romania; introducing cash fow ending techniques to be adopted by the banking industry; estabishing the first non-bank institution to issue residentia mortgages in the country; and deveoping Romania s first consumer finance company and aunching the first innovative energy efficiency fund. RAeF took the ead in estabishing a private, regiona investment fund, the bakan Accession Fund in In 2008, the u.s. congress was persuaded to estabish the nonprofit, charitabe Romanian- American Foundation, from profits generated from the RAeF investments. The Foundation is embematic of America s enduring commitment to the Romanian peope and Romania s historic transition to a market-based economy. 3

5 "I warmy wecome the aunch of the Romanian-American Foundation, continuing the successfu egacy of RAeF. This Foundation is a gift from the peope of the united States to the peope of Romania. It wi serve as a tangibe and enduring symbo of America's commitment to promote positive change and hep Romanians buid a more prosperous future" H.e. mark Gitenstein, u.s. Ambassador to Romania About the Romanian-American Foundation Mission The mission of the Romanian-American Foundation is to strengthen and promote conditions for a sustainabe market economy and a democratic society that provides access to opportunity for a segments of the popuation in Romania. Romanian-American Foundation Promise to Romania The Romanian-American Foundation works to harness American business experience and optimism with Romanian skis and ingenuity for a more prosperous, democratic and entrepreneuria society in Romania. Goa We aim to enabe peope and organizations in Romania, especiay in smaer towns and rura areas, to take advantage of the opportunities presented by gobaization and access to the european union. How We Work The Foundation seeks to coaborate over the ong term with eaders and innovators who share our vision for the best possibe Romania. The Romanian-American Foundation works with partners to foster creative, entrepreneuria institutions and individuas who can hep Romania achieve a society where exceence and opportunity are goas a can pursue and attain. Led by the Foundation staff in bucharest and an internationa board of directors, the Romanian-American Foundation makes socia investments in the areas of entrepreneurship, 4

6 education and community deveopment. We support projects, ideas and organizations that can have broad impact, with strong potentia for repication. We partner with pubic, private and nonprofit eaders and organizations in Romania and America, poicymakers who are engaged in or committed to entrepreneurship and education poicy deveopment and impementation, and other funders in the region. We seek creative partners and program managers who offer good ideas, a strong track record, coaborative skis and shared vaues. We wi identify the organizations and initiatives that can best carry out the Foundation objectives. Program impementation wi be outsourced, in most cases, to externa Program managers that wi operate our programs in areas where they have demonstrated expertise. Program managers wi be estabished organizations with strong eadership, reevant track records, exceent reputation, sound operations and poicies, and core permanent staff. At present, RAF does not accept proposas. Projects are accepted for funding by invitation ony. Areas of Focus In working towards its goas over the next years, RAF wi focus on three main areas which were identified during a broad consutative process conducted in Romania by RAF board members and staff with professionas from the education sector, business, nonprofit organizations, government, and various internationa donors and agencies. The three areas of focus for our socia investments and partnerships are: entrepre neurship, education and community deveopment. We are interested in repication of successfu modes of intervention that are reevant to Romania, and we are ooking for, encourage and support innovation and innovative approaches. Entrepreneurship The Romanian-American Foundation intends to invest in Romanian initiatives that ead to job creation and the deveopment of human capita and businesses. To support this goa we work to increase the entrepreneuria skis and can-do attitudes of individuas and organizations, so there wi be more Romanians wiing and abe to deveop sma businesses, create new economic activities, and innovate. 5

7 Together with partners and program managers, the Foundation wi: Support programs, organizations, events and communications that encourage entrepreneuria activities and socia entrepreneurship. Promote entrepreneurship as a fied of study in secondary and higher education with effective earning and teaching methods; encourage successfu entrepreneurs and professionas to act as guest speakers and resources for entrepreneurship casses and training events; encourage networking, exchange of best practices and peer-earning among the beneficiaries of RAF s programs. Advocate and increase awareness for the emerging fied of socia entrepreneurship. Education The Romanian-American Foundation considers improving the quaity of and access to education a critica buiding bock in promoting economic deveopment and a democratic society. This is especiay true in communities and regions where young peope drop out of schoo eary, hampering or forecosing their successfu transition into the economy through paid empoyment or sef-empoyment. We seek to invest in programs whose good practices have the potentia to be brought to the nationa eve. We are interested in organizations that further our program strategies to: Improve the knowedge and skis of participants (students and teachers), by suppementing skis currenty taught in schoos with those required for successfu integration into the abor market; Increase access to higher education in particuar, and to education in genera and encourage exceence in education; 6

8 Promote the use of effective earning techniques, which encourage participants to experiment, diaogue, critique, compare, negotiate, hypothesize, probem sove and deveop projects through teamwork with the fina goa of contributing to curricuar change and system reform; encourage young peope to become active and to vounteer to take responsibiity to hep sove their communities issues; Disseminate reevant information and encourage exchange of best practices in education among teachers and students; and Improve the quaity of professiona staff in education with innovative teaching methodoogies and training opportunities. Community Deveopment Socia responsibiity and active participation in civi society are essentia to Romania s prosperity. nonprofit organizations are needed to mobiize oca and nationa businesses and individuas as donors and vounteers to hep sove communities needs. The Romanian- American Foundation works to strengthen the nonprofit sector, especiay in sma cities and in rura areas and to promote good governance as basic to the effective functioning of Romania s democratic society. We are interested in making socia investments in this area with partners who support our program strategies: Deveop and fund programs, organizations, networks, action groups or coaitions that contribute to soving community needs through deveopment of oca partnerships, phianthropy, vounteerism and good governance; contribute to the deveopment of oca funders (e.g. community foundations) efforts to stimuate community members to tacke issues that affect their ives and become engaged in soving them in oca democratic processes; encourage and support networking and peer-earning. 7

9 2 Programs

10 PROJECTS financed in Romania Entrepreneurship The piot program Socia Enterprises: Investing in Entrepreneuria NGOs in Marginaized Communities Current Program Managers: NESsT Mothers creating textie toys in the workshop, ACSIS, Bucharest As part of our focus on entrepreneurship the Romanian-American Foundation finances socia enterprises in Romania in partnership with nesst (u.s.-based nonprofit enterprise and Sef-Sustainabiity Team). A socia enterprise is an income-generating activity owned by and operated to benefit a nonprofit or charity. Socia enterprises have twin goas: advancing their socia mission whie generating profits. With the Romanian-American Foundation, nesst provides technica and financia assistance to hep organizations pan, aunch and sustain their socia enterprises. RAF is interested in encouraging the participating ngos to use businesssmart and innovative entrepreneuria programs for strengthening their sustainabiity and impact. Socia Enterprise in Straja an a-season chaet in Vucan Mountains, Fundatia Noi Orizonturi, Lupeni, Hunedoara nesst provides technica and financia assistance for medium-term (4-6 years) to civi society organizations in order to assess, pan, aunch, and hep deveop their socia enterprises. In order to seect the recipients, nesst sponsors competitions for non-profit organizations. Recording a DAISY Book accessibe for visuay impaired peope, Fundatia Cartea Caatoare, Focsani, Vrancea Five socia enterprises wi be supported by the one-year piot program of RAF; the program budget is $80,000. The project has been approved on December 8,

11 Education Entrepreneuria Education in Sma Towns schoos (towns under 50,000 inhabitants and rura areas) Current Program Managers: Junior Achievement Romania - Rura entrepreneuria Program This program is meant to deveop entrepreneuria skis of young peope. Over 5,000 students in 105 schoos wi identify oca opportunities in their communities and wi initiate in teams sma businesses with a potentia for deveopment. Student Company Trade Fair in Coegiu Tehnic Campuung, Arges Student Company Trade Fair in Grup Scoar de Industrie Aimentara, Fetesti-Gara, Iaomita Impemented for 12 years in Romanian schoos, the internationa Student company Program heps young peope earn how to market a feasibe product or service, and to set up and run a successfu business by managing a sma piot company. They have the opportunity to earn a essentia steps of setting up a rea company, from assessing market opportunities, raising capita by seing stock and keeping the company s accounting records. They wi deveop persona skis such as working in teams, communication, decision-making, time management, creative thinking, and wi earn the importance of business ethics. Student Company Trade Fair in Grup Scoar de Industrie Aimentara, Fetesti-Gara, Iaomita RAF approved a three-year grant to Junior Achievement Romania of $255,000 to support the deveopment of Student company Program. The project started on October 1,

12 Community Deveopment Community Foundations: a nationwide deveopment program Current Program Managers: Association for community Reations (ARc) in consortium with environmenta Partnership Foundation and PAcT Foundation The Green Garden from the Kindergarten grant making program impemented by the Cuj Community Foundation, Cuj As part of our commitment to community deveopment the Romanian- American Foundation wi hep buid a network of community foundations, whose focus is invoving oca citizens and businesses in addressing oca probems and aspirations, and generating new donors and oca eadership. community foundations wi stimuate phianthropy and vounteerism, particuary in sma towns, by offering soutions to the community needs. These organizations wi be regiona centers of expertise abe to support the spread of responsibe phianthropy and the expansion and strength of the nonprofit community in Romania. The program manager is the Association for community Reations (ARc) that for the purpose of managing this program formed a consortium with PAcT Foundation and Romanian environment Partnership Foundation. The Cuj Community Foundation s Don Or Awards Gaa, Cuj Romanian-American Foundation joined forces with two exceptiona partners with extensive experience in centra and eastern europe: the chares Stuart mott Foundation and the Trust for civi Society in centra and eastern europe, which financed this initiative with $500,000 each. Aba Community Foundation, Sard viage, Ighiu Commune, Aba RAF aocated a budget of $150,000 for this project for a 3-year period. The project has been approved on December 8,

13 Independent Auditor s Report

14 INDEPENDENT AUDITOR S REPORT We have audited the accompanying statement of financia position of the Romanian- American Foundation (the "Foundation") as of December 31, 2009 and the reated statement of activities and changes in net assets and of cash fows for the period September 29, 2009 (date of inception) to December 31, 2009, prepared in accordance with accounting principes generay accepted in the united States of America. These financia statements are the responsibiity of the Foundation s management. Our responsibiity is to express an opinion on these financia statements based on our audit. We conducted our audit in accordance with auditing standards generay accepted in the united States of America. Those standards require that we pan and perform the audit to obtain reasonabe assurance about whether the financia statements are free of materia misstatement. An audit incudes consideration of interna contro over financia reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation s interna contro over financia reporting. Accordingy, we express no such opinion. An audit incudes examining, on a test basis, evidence supporting the amounts and discosures in the financia statements. An audit aso incudes assessing the accounting principes used and significant estimates made by management, as we as evauating the overa financia statement presentation. We beieve that our audit provides a reasonabe basis for our opinion. In our opinion, the financia statements referred to above present fairy, in a materia respects, the financia position of the Foundation as of December 31, 2009, and the changes in net assets and its cash fows for the period from September 29, 2009 (date of inception) to December 31, 2009 in conformity with accounting principes generay accepted in the united States of America. Deoitte Audit SRL bucharest, Romania Apri 27, Independent Auditor s Report

15 STATEMENTS OF FINANCIAL POSITION December 31, 2009 ($) ASSETS cash and cash equivaents 196,367 Tota Assets 196,367 LIABILITIES AND UNRESTRICTED NET ASSETS Accounts payabe and accrued expenses 20,405 Grants payabe 20,000 Tota Liabiities 40,405 unrestricted net Assets 155,962 TOTAL LIABILITIES AND UNRESTRICTED NET ASSETS 196,367 September 29 December 31, 2009 Unrestricted Changes in net assets: INCOME Income from short term deposits 10 Support and contribution income: - Romanian-American enterprise Fund 350,000 Tota income 350,010 EXPENSES empoyee compensation and benefits 36,830 Professiona services 51,961 Trustees expenses 18,163 Administrative and other 1,166 Tota operating expenses 108,120 Grants (85,000) Income in excess of grants and expenses 156,890 Net currency remeasurement gains (osses) (928) Tota increase (decrease) in unrestricted net assets 155,962 unrestricted net assets, beginning of period - Unrestricted net assets, end of period 155,962 September 29 December 31, 2009 ($) Cash fows from operating activities: Increase/ (decrease) in unrestricted net assets 155,962 changes in assets and iabiities Increase (Decrease) in grants payabe 20,000 Increase (Decrease) in accounts payabe and accrued expenses 20,405 Net cash (used) provided by operating activities 196,367 Net increase (decrease) in cash and cash equivaents 196,367 cash and cash equivaents, beginning of period - Cash and cash equivaents, end of period 196, Independent Auditor s Report

16 1. ORGANIZATION The Romanian-American Foundation (RAF or the Foundation) is a u.s. not-for-profit corporation originay fied in the State of Deaware on October 24, 2008 and thereafter amended and restated in its incorporation on September 29, 2009 pursuant to an agreement between the Romanian-American enterprise Fund and the u.s. Government. The Foundation was formed to advance the purposes of the u.s. Foreign Assistance Act of 1961 and of the u.s. Support for east european Democracy act of 1989 (SeeD Act) by buiding upon the programs estabished by the Romanian-American enterprise Fund by furthering the deveopment of the private sector through education, entrepreneurship and private sector phianthropy and vounteerism in Romania. The Foundation sha be operated as a perpetua endowment. The Foundation is capitaized with an endowment through a grant from the Romanian-American enterprise Fund (RAeF or the Fund). The Fund pays or transfers to the Foundation certain RAeF proceeds, such payments or transfers constituting in the aggregate the endowment of the Foundation (see note 4). The origina source of the grant funds provided by the Fund to the Foundation is the u.s. Government acting through usaid and the funds provided through the Foundation are therefore a gift from the American peope to the citizens of Romania. RAF s mission is to be an effective eadership organization that strengthens and promotes conditions for a sustainabe market economy and a democratic society that provide access to opportunities for a segments of the popuation in Romania. RAF aims to enabe peope and organizations in Romania, especiay in rura and smaer cities, to take advantage of the opportunities presented by gobaization and membership to the european union. The Foundation aocates its resources to support few main program areas: Initiatives in education, community Deveopment, entrepreneurship and Job creation in the non-profit Sector, Student Loan Guarantees, Other Support for Private Sector Deveopment. RAF intends to use two approaches to fund its program strategies: grants and program reated investments. The Foundation generay seeks an externa program manager to execute the objectives of each individua grant, thereby everaging the Foundation s resources. RAF aso consider using program reated investments, such as oans or repayabe grants, to support the cash fow of quaified ngos or other categories of individuas or organization, which have charitabe purposes aigned with RAF s mission. The Foundation maintains offices in new York, ny, with the majority of the Foundation s operations performed through its direct hiring personne in Romania. 15 Independent Auditor s Report

17 2. BASIS OF PRESENTATION The Foundation prepares its financia statements in accordance with the Financia Accounting Standards board (FASb) Accounting Standards codification (ASc) 958, not for Profit entities. The Foundation s statements are reported on a us doar basis. The Foundation is required to cassify information regarding its financia position and activities into certain casses of net assets: Temporariy restricted net assets: contributions to the Foundation are reported as temporariy restricted net assets if received with donor stipuations that imit the use of the contribution. When a donor restriction expires, i.e. when the purpose of the restriction is accompished, temporariy restricted net assets are recassified as unrestricted net assets and reported in the statement of activities as net assets reeased from restrictions. The Foundation did not receive any of such contributions. Permanenty restricted net assets: contributions to the Foundation are reported as permanenty restricted net assets if received with donor stipuations that neither expire by passage of time nor can be fufied or otherwise removed by actions of the Foundation. The Foundation did not receive any of such contributions. unrestricted net assets: unrestricted net assets are those net assets that are not restricted by donor imposed stipuations. Pursuant to the Grant Agreement between the Fund and the Foundation (see note 4), at December 31, 2009, the entire baance of net assets received from the Fund are cassified as unrestricted. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES use of estimates The preparation of the financia statements in conformity with accounting principes generay accepted in the united States of America requires management to make estimates and assumptions that affect the reported amounts of assets and iabiities and discosure of contingent assets and iabiities at the date of the financia statements and the reported amounts of revenues and expenses during the reporting period. Actua resuts may differ from those estimates. cash equivaents For purposes of the statement of cash fows, the Foundation considers a highy iquid financia instruments purchased with an origina maturity of three months or ess to be cash equivaents. As of December 31, 2009 the Foundation hed cash and cash equivaents of $139,454 with one arge united States commercia banking institution and $56,913 with one arge european commercia banking institution. As of December 31, 2009 the Foundation hed foreign currency baances vaued at $13,144. Revenue Recognition Amounts received from the Fund are conditioned on the Foundation s compiance with the requirements of the RAeF Grant and the SeeD Act, which imposes certain u.s. poicy objectives and reporting obigations. Such income is recognized as unrestricted contributions 16 Independent Auditor s Report

18 when received, as management of the Foundation beieves that on receipt it is unikey those conditions wi not be met and that a restrictions on the expenditure of such funds are for the genera purposes and programs of the Foundation. Interest and dividend income - Interest and dividend income is recorded in the period in which is earned. Grants and Grants Payabe Grants are recorded as grants expense in the statement of activities and grants payabe in the statement of financia position when the grant is approved in accordance with poicies set by the board of Trustees, negotiations have been finaized with the grantee, and the parties have signed the grant agreement. In practice, the Foundation generay disburses grants to grantees over time, as funds are required to meet the costs of each program. As a resut, the amount recorded as grants expense in the statement of activities generay does not equa the amount of grants disbursed by the Foundation in a fisca period. As programs deveop, the Foundation and the grantee may agree to decrease the amount of a grant to refect changes in a program not anticipated at the time the grant agreement was signed. As a resut, a net grant expense is reported in the statement of activities. Functiona currency The Foundation s functiona and reporting currency is the u.s. doar. The Foundation s operating transactions are initiated in u.s. doars and exchanged for Romanian ei ony when needed. Revenues and expenses transacted in Romanian ei are remeasured into u.s. doars at the exchange rate in effect on the date of the transaction. A of the Foundation s Romanian ei assets and iabiities are re-measured into u.s. doars at period end officia exchange rate. Re-measurement adjustments are refected in the statement of activities. Donated Services members of the Foundation s u.s. board of Trustees donate significant amounts of their time to the Foundation s work. no amounts have been refected in the accompanying financia statements for such donated services because such donated services do not meet the recognition criteria. Income Taxes The Foundation is exempt from u.s. Federa, state and oca income taxes under the provisions of Section 501(c)(3) of the Interna Revenue code. In addition, the Foundation is exempt from payments of state and oca income taxes. 4. ROMANIAN-AMERICAN ENTERPRISE FUND GRANT On September 29, 2009 the Foundation entered into a Grant Agreement with Romanian-American enterprise Fund (the Fund). The Fund has begun the process of iquidating its investment portfoio, and approximatey $150 miion in proceeds is expected to be generated from the sae, transfer or iquidation of its equity investments, oans and other assets. At the date of the Grant Agreement the Fund has aso committed to repay $25 miion to the u.s. Treasury as return of capita to usaid. It was the consensus of the board of Directors of the Fund, in consutation with usaid, the u.s. Department of States and the congress, that, foowing payment to Treasury, a RAeF proceeds shoud be provided to the Foundation to buid upon the work of the Fund. 17 Independent Auditor s Report

19 According to the terms of the Grant Agreement the Fund sha from time to time pay or transfer to RAF the RAeF proceeds, such payments or transfers constituting in the aggregate the endowment amount which sha constitute the endowment of the Foundation. As of December 31, 2009 there were $350,000 paid by RAeF to the Foundation and $350,000 paid by RAeF to u.s.treasury. According to the terms of the Grant Agreement, the Fund has the right to suspend payment or transfer of a or any portion of the RAeF proceeds and to require repayment or transfer of a or any portion of the endowment amount, together with any endowment proceeds, if foreign poicy grounds exist as described in the Foreign Assistance Act and the SeeD Act. 5. INTEREST AND OTHER INCOME As of December 31, 2009, the foowing interest and other income were earned: December 31, 2009 ($) Interest income on term deposits 10 misceaneous income - Tota GRANTS As of December 31, 2009 the board of Trustees of the Foundation had approved 4 programs totaing $611,000. Out of the approved programs, as of December 31, 2009 the Foundation signed one grant agreement for a tota of $85, RELATED PARTY TRANSACTIONS Reated parties are considered to be reated if one party has the abiity to contro the other party or exercise significant infuence over the other party in making financia or operationa decisions. The Foundation considers as a reated party the Romanian-American enterprise Fund. 8. COMMITMENTS AND SUBSEQUENT EVENT As of 31 December 2009, 2 grant agreements were subject to the competion of negotiations and signing of agreements to the satisfaction of a parties. Subsequent to December 31, 2009 the Foundation signed 2 grant agreements for these programs totaing $230, Independent Auditor s Report

20 Who we are

21 Who we are Board of Trustees Thomas cue Adams, Vice chair of the board of Trustees Harry G. barnes, Jr. Wiiam b. beekman Anne busquet Phiip Henderson John Kipper Dragos Horia manda Ida F.S. Schmertz, chair of the board of Trustees Theodor Dumitru Stoojan Richard n. Viets Staff Deborah brown, corporate Secretary bogdan Giurginca, chief Financia Officer Luminita Lazar, executive Assistant Rodica moise, Program Director Doores neagoe, Senior Advisor Roxana Vitan, executive Director 20