Developments in Expenses
Total expenses in 2017 were €38.2 million, which is deliberately higher than total income, resulting in a deficit of €2.1 million for the year. Although the original plan was a budget deficit of €1.2 million, a number of developments allowed us to plan for a larger deficit in 2017: the reserves grew resulting from the final financial figures of 2016 plus the change in accounting policy and additionally, the Supervisory Board decided to decrease our target level of reserves from €6.0 million to €5.0 million. By doing so, War Child was able to support even more children in 2017. Its total expenses increased by 29 per cent compared with 2016.
War Child aims for reserves at the minimum level needed for the continuity of its organisation, and its policy is to spend any additional reserves on the well-being of children. Expenditures on War Child’s objectives (project activities, communication and awareness raising, preparation and coordination) totalled €33.1 million in 2017, which was €8.0 million (32 per cent) above the expenses on our objective in 2016.
Costs related to generating funds were €3.4 million, €0.2 million below budget and €0.4 million above the prior year. Our fundraising activities resulted in increased income. Expenses on management and administration during 2017 was €1.7 million, which is 4% over the budget.