It would also like to take the opportunity to commend Traidcraft on its good performance in a very turbulent economic climate, even though it has decided that a dividend payment would be inappropriate this year.
The Foundation Trustees were able to review both the Audit Statement of Just Assurance and the Accounts themselves. Whilst Just Assurance provided reassurance of Traidcraft’s transparency and focus, the Foundation has also reviewed the Accounts against the Foundation Principles of the organisation.
Traidcraft as a Christian response to poverty
In reviewing the Accounts, Trustees again welcomed the clear and unapologetic statement of Christian identity and commitment to working with all faiths. They did note that this stance meant that some initiatives were closed to us, but nevertheless felt that this was the appropriate stand to take.
Trustees were pleased to see more speaking opportunities developed within the Christian community, particularly at Christian events such as Greenbelt and New Wine. Whilst Trustees recognised these were not always easy to come by, they felt that attending events and festivals and building support in Churches was an important way to widen our church audience.
However, Trustees noted that Traidcraft had not made large in-roads into either increasing the number of Fair Traders in mainstream churches or seeking links with ethnic churches in the UK. Trustees felt that this was a particular concern in the light of the slight fall in the number of Fair Traders, given their importance not just to sales but to communicating messages about Traidcraft's overall mission.
Trustees wondered whether there was sufficient manpower in this area, but recognising that Traidcraft was about to undertake a strategic review asked that this whole strategy be carefully examined.
Traidcraft's mission is fighting poverty through trade
Traidcraft’s model is to combine trading, support and influencing activities to make trade work in the interests of the poor. We therefore set out our comments under those three headings.
a) Trade
Although it is encouraging that some growth in volumes of purchases from developing world producers has been seen, the small decline in sales overall must be of some concern. Core sales through the Fair Trader channels were suffering from greater mainstream competition, rather than from the recession, but they still remain the bedrock of Traidcraft’s commercial sustainability.
Trustees felt that the overall growth in sales of Fairtrade Marked products in the UK was highly commendable, and that Traidcraft’s role in this should not be underestimated. It was also noteworthy that often Traidcraft led the way in developing whole new sectors for fair trade, which were then adopted by mainstream suppliers, and noted particularly the innovations in rubber gloves and charcoal in the early part of 2009.
However, Trustees expressed some concern that Traidcraft’s business model needed to demonstrate the sustainability and strength of fair trade, and this was weakened by current pressures on profitability.
There was concern that despite the many benefits of Traidcraft’s diverse range of activities, and the important contributions this made to influencing and innovation, we might be spreading ourselves too thinly across so many products, producer groups and countries in view of our small size. Trustees recommend that this area be looked at in depth as part of the 2010 strategic review.
Trustees felt that the benefits of the restructured management team continued to be felt and once again would like to congratulate the Chief Executive on this.
Trustees were very pleased to see that the producer voices were acknowledged and that craft producers were enjoying greater communication from Traidcraft, giving more feedback on their market performance.
b) Support
The growth of TX programmes and recent fundraising successes were commended by Trustees. Trustees felt that the more focussed strategic programmes were helpful both in terms of presentation and more importantly in giving more direction to efforts. In particular, Trustees commended the growth and quality of the programme in India, and were pleased to see East Africa now reaching critical mass too.
However, the need to build up the scale of activity in Bangladesh and South East Asia was also noted. The Foundation Trustees also noted the problem that recent major grant successes had raised, with matched funds being hard to raise through public fundraising in the current economic climate.
c) Influence
Trustees felt that the Social Accounts showed how influential Traidcraft was for its size. They also noted the current staffing challenges facing Traidcraft’s Policy Unit, with two senior staff on maternity leave and the director having just left to take up a new role at the Fairtrade Foundation.
Traidcraft respects all people and the environment
As Foundation Trustees we recognise the importance of Traidcraft modelling good relations with its own staff. Trustees noted that the Staff Survey showed good improvements on last year, that management took concerns raised very seriously, and that overall scores were at high levels compared with many other organisations. The scores were particularly commendable with the survey having taken place so soon after an announcement of a pay freeze for all staff.
For another year, good progress on environmental awareness seems to be being made. However, Trustees feel that Traidcraft will need to adapt its business and development models further to respond to the environmental agenda as it gains further momentum. Traidcraft could make more of the many stories of positive environmental benefits already flowing from its work with producers, but it also needs to address more explicitly the nature of the trade-offs between poverty reduction and environmental sustainability.
Traidcraft abides by and promote fair business practices
As well as Traidcraft’s work to promote Fair Trade, and its pioneering of best practices within fair trade, Trustees noted Traidcraft’s role as a founding member of the fair trade movement and the importance it attaches to developments in this work.
Trustees also see this area as important and would like to encourage Traidcraft to continue to work in this area despite the pressure on resources it currently faces. The Trustees also noted Traidcraft’s considerable work on supermarket practices during the year, with many inputs given to the Competition Commission as they investigated breaches of the Groceries Code, as well as continuing work to promote responsible business practices.
Traidcraft strives to be transparent and accountable
The Trustees noted with pleasure the further commendation received by Traidcraft in the ACCA Sustainable Reporting awards. It was disappointing that this award scheme was not to be run again in 2009.
Trustees felt that the Social Accounts were becoming rather lengthy, but recognised that they would not normally be read as a document in its entirety but rather as an online resource to be dipped in and out of, and welcomed the greater number of case studies and illustrative material they contained.
As such, Foundation Trustees were happy with the clarity and disclosure within the accounts. Trustees felt there was still scope for further benchmarking and context setting to allow better assessment of the achievements reported.
Although Trustees accepted that some aspects of Traidcraft’s impact are difficult to measure, benchmarking and better indicators needs to be in place where at all possible. For example, it would be helpful if we were able to show how many people were affected by different aspects of Traidcraft’s work.
Conclusion
Overall, the Trustees feel that, despite the difficult climate presented last year, these social accounts underline the fact that Traidcraft has continued to make exciting progress on many fronts, through the commitment of a strong team of stakeholders: staff, producers, partner organisations and supporters of many different types. We would like to congratulate and thank all those stakeholders for their exceptional achievements.
Reg Bailey
Chair
Traidcraft Foundation
September 2009
