Financing foodwatch

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How foodwatch is financed

29.07.2011

In order to operate independently foodwatch accepts no government funding and is financed by membership fees and donations. foodwatch is a non-profit organisation.

To ensure that its work is not influenced by any interests other than those of the consumer, foodwatch neither solicits nor accepts government funding. Furthermore, foodwatch never accepts donations from the food industry or larger companies in the food retail sector. foodwatch checks the source of any donation totalling EUR 500 or more per year, be it from a company or individual, in order to ensure that no connection exists to the above-specified industries. All major donors are listed by name on the foodwatch website.

Revenue 2010

In 2010 – its ninth year of existence – foodwatch was able to campaign for the rights of consumers with a budget of EUR 1,562,258, thanks to the support of almost 18,000 sustaining members. Seventy-nine per cent, or EUR 1,237,650, of these revenues came from membership fees and small donations. In 2010 foodwatch received contributions of more than EUR 5,000 from (in alphabetical order) the individuals Gerhard Bremicker and Alexander Szlovak, as well as from the Gregor Louisoder Umweltstiftung (an environmental foundation) and the Hoffmann und Campe publishing house.

In 2010 the revenues from major gifts, foundations and bequests amounted to EUR 282,407 (18 per cent of the total revenue). The remaining three per cent classified as "other revenue" included, above all, compensation for travel expenses incurred for speaking engagements and media appearances, as well as funds reimbursed to foodwatch Germany by foodwatch Netherlands. Interest earnings and honoraria for speaking engagements are also included in this figure.

Expenses 2010

Campaigns for defending the consumer’s right to good-quality, safe and honest foods are central to the work of foodwatch. Campaign coordinators identify problems, analyse current situations, commission scientific studies and laboratory tests and define targets and strategies for foodwatch’s activities. Campaign work also involves informing and mobilising consumers.

In 2010 foodwatch’s campaign for the introduction of mandatory traffic-light labelling for foods was its central focus leading up to the European Parliament vote mid-year. For this campaign foodwatch intensified its lobby work on the European level and forged alliances with organisations in the health sector, such as health insurance organisations. On the basis of actual products, foodwatch regularly documented the importance of understandable food labelling.

In 2010, on its website www.abgespeist.de, foodwatch once again exposed a series of cases involving fraudulent labelling and mobilised thousands of consumers to take action and complain directly to the respective manufacturers. In an online vote consumers chose Zott’s Monte Drink, a children’s product, as "the biggest advertising lie of the year". foodwatch "honoured" the manufacturer, Zott, with its renowned "Golden Cream Puff" award. foodwatch also published analyses for oxygen-treated meat, campaigned for the publication of food safety inspection results with the smiley used in Denmark and sparked a broad debate on "legal consumer fraud" in Germany.

Campaign-related expenses amounted to EUR 726,634, which is equivalent to 53 per cent of the organisation’s total expenditure.

Media and public relations work

The German magazine Der Spiegel called foodwatch "a small, efficient staff of hard-hitting PR professionals." The German weekly Die Zeit wrote: "Organisations like foodwatch (…) influence issues by providing reliable information and uncovering one scandal after the next." foodwatch has tasked itself with representing the interests of the consumer. This would not be possible without professional public relations work. Public pressure and the media are essential tools for persuading politicians to act in the interest of the consumer. Accordingly, active public relations work, frequently updated website content and online campaigns represent an important part of this work. In 2010 foodwatch spent EUR 202,537, or 15 per cent of its total expenses, in this area.

Member support and services

Organisations that supply a lot of information receive a lot of questions. To handle questions and feedback from members and other interested individuals, foodwatch offers an information hotline and members’ hotline, as well as nutrition advisory services. Members can also update their foodwatch membership data at any time by telephone or e-mail. In 2010 foodwatch spent a total of EUR 137,051 on these services, or ten per cent of its total expenses.

Member acquisition and fundraising

Membership organisations have to do marketing work, which consists primarily of member acquisition. This is especially true for organisations – like foodwatch – who want to remain independent and accept no government funding. The fact is: new members don’t just show up at your door. Studies show that only about ten per cent of the supporters of membership organisations become members spontaneously. The other 90 per cent must be recruited through personal contact and outreach. In its marketing work foodwatch focuses on the use of phone calls, letters and emails to provide information to potentially interested inviduals and recruit new sustaining members. In 2010 foodwatch invested EUR 168,329 (12 per cent) in its member acquisition and fundraising activities. These expenses represent an investment in the organisation’s future: by paying regular dues, sustaining members secure the financial basis for the organisation’s other activities. And they give foodwatch a stronger public voice.

Administration

Like any organisation foodwatch would not be able to effectively pursue its aims without a well-equipped office and a sound organisational structure. Administration, bookkeeping and management assistance represent a strong foundation for the organisation’s work. In 2010 administrative costs totalled EUR 139,391, which was ten per cent of the total expenses.

Every year foodwatch has its annual financial statement audited (voluntarily) by an independent auditor. The 2010 annual financial statement was audited by the accounting firm Quabeck & Partner and awarded an unqualified audit opinion.

A copy of the annual financial statement is available upon request.

Comparison: Revenue 2010/2009

Comparison: Expenses 2010/2009

The amount spent on certain fields of activity as a percentage of the total expenditure in 2010 differed significantly from that of 2009. For example, in 2009, 15 per cent of foodwatch’s total expenditure was spent on administration, as compared with only 10 per cent in 2010.

This change is the result of a new system of cost allocation. In 2010 foodwatch began using cost unit accounting. This method is especially well suited to meet the needs of a modern cost accounting system. Under the new cost unit accounting system, costs for individual activities will now be assigned directly to the cost centre responsible for their origin. This system of allocation is more accurate and objective, increasing the level of transparency.

Examples:

1. From now on, if an office assistant sends an official statement to members of parliament on behalf of a campaign employee, these costs shall be assigned to the cost centre “campaigns” instead of, as in the past, “administration”.
2. Until now, all online expenses have been assigned to the cost centre “media and PR work”. However, when foodwatch sends a newsletter calling on recipients to take action in a campaign, for example, this activity falls under campaign work and contributes significantly to the success of the campaign. Therefore, from now on, a portion of the online expenses shall be assigned to the cost centre “campaigns”.

The distribution ratios are determined in cooperation with the auditor and documented in the Audit Report. These ratios are reassessed annually and updated whenever necessary. After the introduction of the new system in the 2010 reporting period, the comparability of figures must be re-established for the following years.

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