1

GENEVA AGAPE FOUNDATION

ANNUAL CONFERENCE, “FAITHINVEST:

IMPACTFUL COOPERATION”.

VENUE: ECUMENICAL CENTRE,

GENEVA, SWITZERLAND

DATE: 16TH – 18TH, JANUARY, 2020

BY: DR. BRIGHT G. MAWUDOR, ACMA, CGMA, CA, MBA, PhD

AACC DEPUTY GENERAL SECRETARY

2

TOPIC: FBOs and Investments In

Mission

Case of the All Africa Conference of

Churches (AACC)

PART 1: INTRODUCTION:

Quote: “ Wealth creation is rooted in God the

Creator, who created a world that flourishes with

abundance and diversity. We are created in God’s

image, to co-create with him, to create products and

3

services for the common good. Wealth creation is a

holy calling, and a God-given gift, which is

commended in the Bible”. Lausanne Movement

TOPIC: THE SEVEN ANCIENT PILLARS

& PRINCIPLES OF INVESTMENT

• Pillar One: Principles of Semper Fidelis –

Luke 16:10 - “He that is faithful in that

which is least is faithful also in much and he

that is unjust in the least is unjust also in

much”.

4

• Pillar Two: Principle of Cold and Hot - Genesis

8:22 - “While the earth remaineth, seedtime and

harvest, and cold and heat,….shall cease”.

• Pillar Three: Diversification - Ecclesiastes 11:2 - “

Divide your portion to seven or even eight for you

do not know what misfortunes may occur on earth”.

• Pillar Four: Principle of Consistency –

Ecclesiastes 11:6 - “In the morning sow your seed

and at evening withhold not our hand; for you do

not know which will prosper, this or that, or

whether both alike will be good”.

5

• Pillar Five: Principle of Multiplication – Luke 19:

12 – 26 - “Parable of Talents”.

• Pillar Six: Principle of Watching over your

Investment – Proverbs 27:23 - “Be though diligent

to know the state of thy flocks and look well to they

herds”.

• Pillar Seven: Principle of Tithing – Malachi 3:10

– “Bring the whole tithe into the storehouse, that

there may be food in my house. Test me in this,"

says the LORD Almighty, "and see if I will not

throw open the floodgates of heaven and pour out

so much blessing that there will not be room

enough to store it”.

6

PART 2:

• The development history of all Sub-

Saharan Africa has in many ways hinged

on the roles played by Churches and their

related organisations over the last 50 years.

• Churches built hospitals, schools,

agricultural stations as part of their mission

work.

• Research by CORAT – Africa in 2008

shows that most CROs are barely surviving

or in crisis.

7

• In 2009 the mega-rich Trinity Church in New York

commissioned six African Anglican Bishops to

explore the possibilities of rendering the Anglican

Communion in Africa financially sustainable.

• In 1996, the AACC in response to its 173 member

Churches held a conference in Nairobi on

“Sustainability of the Church in Africa”.

• For the greater part of its nearly 60 years in

existence, the AACC relied heavily (almost 80%)

on grants from its overseas partners for its

programme delivery with little in-built mechanism

or strategy for financial independence.

8

• By 2002, the organization was in financial

crisis for various reasons including: weak

financial management/ strategy, dwindling

donor funding, weak delivery in

programmes, waned loyalty to the AACC as

a brand, lack of innovation, etc.

9

PART 3:

AACC TURNAROUND STRATEGY:

By 2003 the leadership of the organization

developed a “Turn-Around Strategy” which

included:

• Re-branding the organization

• Financial Sustainability Strategy (Appendix A)

• Reduce dependence on “partner” funding

and cover core overhead costs

• Ambitious plan to make the organization a

“donor” organization by 2025 (Appendix B)

10

AACC RECOVERY ROADMAP:

1. Undertook organizational audit and health

check (governance, mandate, organisational

systems and structures, resources, asset

mapping and valuation, management, market

survey etc.

2. Reviewed systems and developed policies

manuals (viz Financial regulations and

procedures, procurement and HR manuals etc).

3. Developed Business continuity plan.

4. Budget and cash flow forecast.

11

5. Developed a Roadmap to Financial

Sustainability.

6. Established “Strategic Business Unit” (SBU)

the Investment / Business wing of the AACC.

Profit from the Unit should be used to support

the mission and programmatic work of the

AACC.

7. Registration of “AACC Investment Trust

Limited” to run the Business wing (SBU) with

its own Board.

8. Launched “Campaign for African Dignity” –

“One dollar per member”.

12

8. Guiding principles:

• Regular risk mapping and analysis.

• The “3Es” Concept:

Economy (prudence of minimizing costs at all

opportunities)

Efficiency (resources achieving maximum results

with minimal waste)

Effectiveness (organisation meeting its objective as

completely as possible)

• Ensuring “Value for Money” Concept in all

expenditures.

• Transparency in all transactions.

13

PART 4:

YEAR 2013 YEAR 2014 YEAR 2015 YEAR 2016 YEAR 2017 YEAR 2018

YEAR 2019 (8 months

Unaudited)

AMOUNT IN KENYA SHILLINGS

Total Operating Income

431,272,598

328,245,681

315,757,958

315,088,574

326,183,586

340,313,054

252,698,510

Operating Expenditure

(350,655,377)

(266,654,320)

(280,201,478)

(309,983,727)

(314,816,307)

(377,679,956)

(225,473,826)

Net Operating Surplus 80,617,221 61,591,361 35,556,480 5,104,847 11,367,279

(37,366,902) 27,224,684

Extra-ordinary items -

1,177,285,717 -

125,913,591

90,000,000 - -

Total Comprehensive

Income

80,617,221

1,238,877,078

35,556,480

131,018,438

101,367,279

(37,366,902)

27,224,684

Equivalent in US$ 806,172 12,388,771 355,565 1,310,184 1,013,673 (373,669) 272,247

SOURCE OF

INCOME

2013 %age 2014 %age 2015 %age 2016 %age 2017 %age 2018 %age 2019 %age

KES KES KES KES KES KES KES

Grants from

partners 232,690,206 76% 133,114,476 71% 109,407,325 58% 112,890,632 65% 129,175,820 40% 147,284,810 43% 96,981,890 38%

Membership

contribution 2,871,805 2% 2,822,028 2% 2,917,555 1% 2,306,454 1% 2,963,365 1% 4,364,333 1% 1,716,645 1%

Strategic

Business Unit 184,602,889 17% 191,135,132 18% 201,879,667 28% 198,751,091 33% 193,344,881 59% 177,147,548 52% 152,635,467 60%

Other income 11,107,698 2% 1,174,045 9% 1,553,411 13% 1,140,397 1% 699,520 0% 11,516,363 3% 1,364,507 1%

TOTAL

INCOME 431,272,598 100% 328,245,681 100% 315,757,958 100% 315,088,574 100% 326,183,586 100% 340,313,054 100% 252,698,510 100%

TOTAL OPERATING INCOME BY CATEGORY

FINANCIAL RESULTS: CONSOLIDATED STATEMENT OF INCOME AND EXPENDITURE (2013 – 2019)

REAL ESTATE

YEAR INCOME EXPENDITURE OPERATING

SURPLUS

SUPPORT TO

MISSIONS &

PROGRAMMES

NET SURPLUS

KES KES KES KES KES

2013

76,841,784

(25,735,822)

51,105,962 (9,443,586) 41,662,376

2014

72,460,089

(23,702,825)

48,757,264 (18,689,730) 30,067,534

2015

76,732,195

(23,899,515)

52,832,680 (36,283,213) 16,549,467

2016

83,534,609

(32,707,080)

50,827,529 (49,535,787) 1,291,742

2017

89,815,698

(41,588,125)

48,227,573 (38,263,238) 9,964,335

2018

91,790,642

(30,898,862)

60,891,780 (48,713,424) 12,178,356

2019 (8 months

unaudited)

72,142,550

(23,560,605)

48,581,945 (29,190,879) 19,391,066

CUMULATIVE

TOTAL

399,384,375

(147,633,367)

251,751,008 (152,215,554) 99,535,454

Equivalent in

US$

3,993,844

(1,476,334)

2,517,510 (1,522,156)

995,355

STRATEGIC BUSINESS UNIT RESULTS

CONFERENCE CENTRE

YEAR INCOME EXPENDITURE OPERATING

SURPLUS

SUPPORT TO

MISSIONS &

PROGRAMMES

NET SURPLUS

KES KES KES KES KES

2013

107,761,105 (73,152,002) 34,609,103 (2,360,897) 32,248,206

2014

118,675,043 (86,974,109) 31,700,934 (4,672,432) 27,028,502

2015

125,147,472 (97,771,155) 27,376,317 (9,070,803) 18,305,514

2016

115,216,482 (100,760,405) 14,456,077 (12,383,947) 2,072,130

2017

103,529,183 (88,812,711) 14,716,472 (9,565,810) 5,150,662

2018

85,451,244 (89,873,413) (4,422,169) - (4,422,169)

2019 (8 months

unaudited)

80,492,917 (71,100,005) 9,392,912 (2,348,228) 7,044,684

CUMULATIVE

TOTAL

736,273,446 (608,443,800) 127,829,646 (40,402,117) 87,427,529

Equivalent in

US$

7,362,734

(6,084,438)

1,278,296 (404,021)

874,275

STRATEGIC BUSINESS UNIT RESULTS

16

PART 5:

CHALLENGES:

• Changing the mind-set of the top leadership /

Governing organs of the organization that

strategic investment in mission is possible.

• How to separate and run the business wing

from the normal programmatic work of the

AACC.

• Management of businesses and operational

risks associated with running the business wing

(SBU)

• Ensuring ethical values in our investments as

well as maintaining high rate of return on

investments.

17

PART 6:

LESSONS LEARNT:

• Doing business with a human face is

possible.

• The AACC’s experience demonstrates how

an FBO can do investment with religious

values as well as economic values for a better

world – i.e to help the economy to serve the

common good.

• Between 2013 and 2019 total support from

SBU to programmes was almost $ 2.0m.

18

PART 7:

ECONOMIC AND SOCIAL IMPACTS:

• Empowerment of 230 young women and youth

via entrepreneurship training for wealth creation.

• Empowerment of 680 newly elected Bishops /

Church leaders in leadership and diaconal

management, advocacy and resource mobilization.

• Support to 32 Churches across Africa on

widowhood rights/programmes.

• Asset value increased from Ksh 1,186,099,

533(equivalent US$ 13.5 million) to Ksh

2,600,326,442 (equivalent US$ 25.7 million)

19

• Revival/Restructuring of Mindolo Ecumenical

Foundation, Zambia.

• Mini-project with minimum of $2,000.00 per project

to support women initiatives across Africa.

• Promotion of African Union Agenda 2063 and SDG

2030.

• Collaborated with Globethics to empower Real

Estate Officers on Asset Management (ACAP).

• African patriotism campaign among the youth,

“Africa My Home, My Future”.

• Migration and Human trafficking programmes.

• $ 30,000 support to South Sudan refugee

programme in Nothern Uganda

• Support for Ebola victims in Sierra Leone and

Liberia during the Ebola crisis.

20

Promote women’s rights and elimination of sexual

and gender based violence (SGBV).

Enabled Launch of AACC’s campaign for the

“Plight of Widows” during the International

Widows’ Day on 23rd June, 2019, out of which we

have developed a documentary to facilitate the

campaign through social media.

Development of Women, Peace and Security

(WPS) Framework and an implementation matrix

to enhance women’s engagement in peace

processes.

Development of AACC Gender Strategy.

21

Resulted in influencing gender justice at the policy level

through engagement with the AU Women, Gender and

Development Directorate (AUC WGDD); UN Women

(East and Southern Africa Region); UNFPA (United

Nations Population Fund) among others.

Enabled AACC to do High Level Advocacy in Global

forums, showcasing the role of the Church/Religion in

promoting gender justice. Examples are: Participation

at The Commission on Population and Development

(CPD51 and 52) meetings at the UN Head Quarters in

New York; the Nairobi Summit (ICPD+25) held in

Nairobi on 12-14, 2019; International Conference on

Family Planning (ICFP) held in Kigali, Rwanda in

2017, among others.

22

PART 8:

FUTURE STRATEGY AND EXPECTATIONS:

• Install solar panels in rental properties to cut on

electricity cost which is about $ 6,000 per month (or $

72,000.00 per annum).

• Look for grant or a soft loan to implement the solar

project.

• Partnership to develop our properties in Nairobi.

• Reduce donor dependency to zero; but partner with

donors on programmes of mutual interest.

• Channel substantial part of surplus funds into poverty

reduction and social impact programmes in Africa.

• Be role model to Churches in Africa about investments

as a driver to missions.

23

PART 9:

CONCLUSION:

• Financial sustainability and stewardship of

resources are ever present issues for FBOs

as they seek to balance their mission with

financial responsibility.

• There is a growing tendency for FBOs to do

“investment in mission” where expected

return is commensurate with the market

rate of return.

24

• We must work and use our talents to create

Wealth; “if a man will not work, he should

not eat”, St. Paul’s letter the Thessalonians.

AACC PROPERTY DEVELOPMENT STRATEGY 2009 to 2025

FLOW OF FUNDS CHART (Currently Under Review)

Development of Ngong View Apartments

Construction of 2NO. Mugumo

Villas 2009

All Debts Paid AACC as a ‘donor’

Organization

Land Bank and other investments

Dennis Pritt Rd-Serviced Apartments 2009 - 2010

Waiyaki Way - Office Block

Debt Repayment

Support to AACC Administration (from

2011)

Tigoni Rd – Office Block 2009-2010

Tigoni Towers Office Block

Surplus –land plus profit USD 3.45M to be utilized as follows:- a) USD 0.41M for repayment of old

loan for Waiyaki Way Office Block

b) Equity injection of USD 1.28M for

construction of Waiyaki Way

office Block

c) USD 1.75M for repayment of

Dennis Pritt serviced Apartments

Loan

Rental Proceeds USD 0.37M

Construction of 2No. Villas –USD

0.51M

Profit plus Land Equity –USD 1.25M

2008

2009

2011

2012 - 2020

2020

2025

USD 1.75M

Rentals

USD 3.62M

USD 1.41M

APPENDIX B

THANK YOU

26