Every year, generous donors entrust E4 Project with their giving as they serve with us to defend the cause of the poor and needy in Gabon and Congo. The stewardship of these funds is something we take very seriously and we thought it would be helpful to communicate exactly what happens to those donations, both as they are given in the USA and then entrusted to our ministry partners in Africa.
We guarantee that at least 90% of every dollar that is entrusted to us for one of our causes is used directly for that intended purpose, whether that is for the malnutrition program in Congo, supporting the Hands of Grace sewing center in Gabon or any of our other partner programs. The remaining 10% is used to help cover E4 Project administrative expenses such as international banking fees, credit card transaction fees from online donations, insurance, bookkeeping and accounting services and to some extent staff salaries. Although 90% is the general rule, there have been several causes and projects where we chose to send 100% of donated funds. For example, we chose to do this while responding to the malaria/salmonella epidemic in Nebobongo in the spring of 2016 since it was in response to a crisis.
American non-profit organizations are generally considered fiscally efficient if over 75% of donor funds are used directly for program costs and the gold standard is 90% and above. As of 2017, E4 Project is not big enough for our administrative to giving expense ratio to be under 10%, (in 2016 it was 24%) but we believe that our donors give with the expectation their funds will be primarily used to directly help the cause they chose to give toward, which is why we are committed to only retaining a maximum 10% of designated donations for administrative costs.
In addition to our causes, we also have our general fund. This account is used to cover the bulk of our operations and also gives us the flexibility to respond to unexpected needs from our partners (like when lightning damaged Nebobongo hospital) and make up gaps in program funding for things we deem critical but are short in designated gifts. The majority of this account is funded by board members and donors who believe in the overall mission of E4 Project. Without their support none of what we do would be possible.
We do our best to run a very frugal yet effective administrative operation. Since our founding, we have only ever had two full-time staff and went though a period of being completely board-run. In 2016 we had one full-time staff person managing partnerships, an hourly bookkeeper and our co-founders, Eric and Brynn, voluntarily taking on executive and administrative roles to round out our team. We have no physical office space with everyone working remotely from home and we even try to cover our international travel expenses with team fees. In late 2016, our team and the board decided we had to make some new hires to keep up with our growing partner ministries and also bring in some new church partners and donors to support our expanding scope of operations. As of March 2017, E4 Project hired two new partnership coordinators, one full time and one part time, effectively doubling our paid staff.
As you can imagine this growth will strain our already tight general funds, making direct E4 donations even more important during this stage of organizational growth.
Financial Oversight: E4 Project has an independent board that reviews the finances of E4 Project. We also publicly publish our form 990 tax filings on our website and E4 Project now has a financial history long enough to apply for certification through the Evangelical Council for Financial Accountability, (ecfa.org) and will begin that process this year.
What Happens to Donor Money Once it Goes Overseas? Transparency is something we champion in all of the ministries we work with in Congo and Gabon and we take it very seriously. In the last few years we have unfortunately had to abandon partnerships with ministries that rejected or eluded financial oversight. Reporting varies depending on what works best for each ministry we partner with so here is a brief synopsis of how we track funds in each of our ministries.
All Congo Ministries: This includes Nebobongo Hospital, the malnutrition program, Project Sunset, Animals of Opportunity, Jean Claude’s support and the new primary school, as well as responses to emergency situations and disease outbreaks. All funds are wired to a bank account controlled by CECCA-16, our partner church denomination. Withdrawing funds from the bank requires a check signed by both the president of the church and the medical director of Nebobongo Hospital. Once funds are in the hands of the church, any expenditure requires documentation and signatures from 2-3 authorized people and the expenditure is then recorded in ministry specific ledgers. All of our partner ministry programs have a designated ledger and we receive a quarterly report from the church detailing all of the transactions made through our partners. If we have a question or concern with a transaction each ledger entry is associated with a carbon copy receipt signed by the 2-3 people responsible for the purchase we can follow-up with. Bookkeeping has not always been this thorough and we are very encouraged by the willingness of CECCA-16 to embrace transparency and improve its bookkeeping practices. In 2017 for example, Nebobongo Hospital created their first ever annual report based on 2016 reports and shared it with hospital staff; something they had never been able to do. This has allowed them to create an annual budget for 2017, which is the first budget they have ever had. It is now allowing them to think about the future in strategic ways never before possible.
Gabon Ministries: Similar to our work in Congo, all of our program funds are wired to a bank account controlled by the Christian and Missionary Alliance of Gabon, our local denominational partner. From there funds are distributed to ministries that each have their own reporting structures best suited for them. We have partnered with the church so that they could provide for and create a role for Pastor Jacob to work more intentionally with our partner ministries, under their direction and accountability.
Hands of Grace: The business manager for Hands of Grace reports sales income and expenses monthly via a jointly developed reporting form. Pastor Jacob, the church designated overseer of the ministry then visits each month to verify receipts and check cash balances. After this happens each month, E4 will wire over an appropriate amount of money to meet the needs of the next month of operations. Over time the goal is to have this ministry flourishing without assistance from E4 Project.
Hope House: Pastor Israel who runs House House has too much on his hands to accurately provide us reports. As a result of this, he does not manage any cash. Again, Pastor Jacob acts as the church overseer and is approved by Pastor Israel to make purchases on his behalf. Every month he takes the funds from the national church office that have been wired over and visits Hope House to find out what their needs are that month, ranging from school uniforms to food or medical needs. He then goes out and purchases what is needed and sends us the receipts. This creates a lot of work for Pastor Jacob, but it is the best way we have found to reasonably safeguard the sponsorship funds from potential abuse.
HIV Hope: HIV Hope is its own independent NGO with an independent board, but still collects project funds via the church. Reports on activities are consistently sent to E4 Project directly by Martin Mbavu, the program founder and director.
PK27: The construction and fundraising at PK27 is led by the Gabonese Alliance Church. The church fundraises in Gabon for this project, which is then matched by E4 Project funds. All donations made in Gabon by Gabonese churches are funneled through the treasurer at the national office, not through the ministry leader. E4 Project matching funds are then sent to the national office as well. The ministry leader is then responsible for providing receipts for all expenses to the national office. We are working with the church to put a committee in place to help manage the development of PK27 including a finance director that will be able to eventually take over all financial responsibilities adding an additional level of transparency.
We hope this provides a basic understanding of how your donations are used and protected. We take the stewardship of money entrusted to us very seriously, if you have any questions please do not hesitate to direct them to Dan Lewan (firstname.lastname@example.org) and Brynn Schmidt (email@example.com) Thank you for your generous support, we are continually humbled by what the Lord has done through the programs we have sponsored and your donations make you a part of it.