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← Alfanar

2023-12-31-accounts

J Li£LI I ALFANAR 2023 Impact Report ALFANAR VENTURE PHILANTHROPY

Vision

Educated children, employed youth & economically empowered women across the Arab region

Priority Areas

Education, Employment, Empowerment & Environment

2

Mission

Foster the growth of sustainable, scalable social enterprises

Contents

02

03

The Challenge Welcome

04 2023 in Numbers 05 Reach & Impact 06 Venture Philanthropy Approach 08 Commitment to Financial Sustainability 10 ASSET & AIM 12 Impact Investing 14 Education Portfolio 18 Employment Portfolio 22 Empowerment Portfolio 26 Environment Portfolio 30 Emergency 31 Outreach 33 Luminary Internship Programme 34 2023 Results 35 2024 Plans 37 Financial Review 38 Board & Team 39 Structure, Governance & Management 46 Independent Auditors Report 50 Statement of Financial Activities 71 Thank You

Alfanar opened our horizons, allowing us to focus on the goals we need to achieve. Safiah AbuShanin CEO, Hands of Sitti Alfanar Jordan SEED Portfolio

Alfanar 2023 Annual Report | 2

The Challenge

The Arab region is the only region in the world where poverty has consistently increased over the past decade. Political, social and economic instability, heightened inequality and worsening environmental conditions all contribute to this trend, creating complex challenges felt most acutely by disadvantaged groups. Women, children and refugees living in slum communities and marginalised rural areas lack the access to quality education or opportunity they need to secure productive and dignified futures.

Addressing these issues demands urgent solutions that are sustainable into the future. Using a venture philanthropy approach, Alfanar supports innovative social enterprises that are working to tackle systemic inequalities and provide opportunities to communities that need it most.

By investing in ambitious, local social enterprises across the Arab region, we are building an ecosystem of enduring social and environmental change.

59% of children cannot read or understand an ageappropriate text by age 10

Unemployment among young women is 80% higher than among young men

The MENA region hosts the largest number of refugees and migrants in the world

Youth unemployment in the Middle East and North Africa (MENA) consistently ranks the highest in the world

Temperatures in the Arab region are increasing twice as fast as the global average due to climate change

Alfanar 2023 Annual Report | 3

Welcome

2023 was a tumultuous year for the Arab world. Devastating earthquakes in Syria and Morocco, flooding in Libya, civil war in Sudan, economic crises in Egypt and Lebanon and tragic violence against families in Gaza have impacted millions of lives and exacerbated regional insecurities. Amidst difficulty and human struggle, there were glimmers of hope as social enterprises never ceased to innovate and collaborate to respond.

As Alfanar enters its 20th year, empowering enterprises for social change has proven to be a beacon of hope and stability in the face of tumult. Our venture philanthropy model provides comprehensive support to social enterprises developing innovative solutions to bolster children’s education, youth employment and women’s economic empowerment. By finding, funding, training and supporting the growth of the most promising social enterprises in the region, we are fostering impact for marginalised communities that continues to grow into the future.

2023 marked the second year of our current growth plan, with a goal of supporting more social enterprises and improving more lives sustainably. Thanks to your help, this has been a tremendous success. We fulfilled the pledge made at our 2022 gala and improved the lives of 107,152 women and children within 2023, representing 27% of our entire impact footprint since 2004. We delivered £1,876 million in funding and management support to 60 social enterprises, and training to an additional three social enterprises outside our portfolio. Our venture philanthropy support enabled our portfolio to not only grow its impact, but to achieve an average cost recovery rate of 66% through the sale of goods and services.

The scale of our growth and impact is a testament to the power of the venture philanthropy approach. On average, our social enterprises are able to impact 37% more lives and to self-generate 34% more sustaining revenue through our support. With the backing of institutional and individual donors, Alfanar has been able to dedicate more resources to training, management support, capacity-building and access to networks coupled with our unique, multi-year SUSTAIN grants.

2024 is slated to be the most transformative yet. We are working hard to move towards improving the lives of 150,000 women and children per year, to

provide SEED support to over 55 social enterprises – of which we expect 15 to progress to our long-term SUSTAIN support programme. Our venture philanthropy activity will be fully operational through registered entities and partnerships in Egypt, Lebanon, Jordan and Palestine. In parallel, we are supporting the launch of the first regional impact investment fund for the Arab world.

On behalf of the Alfanar Board and team, we thank you for believing in our mission and for supporting us to grow innovative solutions that uplift communities in need at a time when hope feels like it is being extinguished. With your help, Alfanar can continue to serve as an engine to ignite enduring and sustainable opportunity and transformational change across the Arab world.

Lubna S. Olayan Myrna Atalla Board Chair Executive Director

Alfanar 2023 Annual Report | 4

2023 In Numbers

£1,875,960

Alfanar Funding & Management Support

22,806

Hours of Management Support Delivered

63

Social Enterprises Funded & Trained

107,152

Lives Directly Impacted

----- Start of picture text -----
400000
300000
37%
200000
Lives Impacted
100000 Growth Rate
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
----- End of picture text -----

4,143

Women employed or launched / grew new businesses

9,085

Children and youth gaining access to quality education

66%

Average cost recovery rate of enterprises

£3,563,790

Revenue Generated by Social Enterprises

----- Start of picture text -----
20000000
15000000
34%
10000000 Self-Generated Revenue
5000000 Growth Rate
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
----- End of picture text -----

Alfanar 2023 Annual Report | 5

Reach & Impact

LEBANON

SEED Cycles YELA SEED Cycle Management Support Powered by GIZ & BMZ Powered by Drosos 1st Cycle 2nd Cycle 3rd Cycle 4th Cycle Creative Space Beirut Beirut Bloomers Agonista D4Communities Ahla Fawda IECD Find a Nurse Code Brage Espace Fann Garbaliser LLWB Plastic Lab Little Melly Foodsight Littera Seenaryo Nadeera Refuse UDiversity Supportful Semeurs D'Avenir SIIRA The Volunteer Circle IRAP UWYTA Zoukak SUSTAIN Portfolio REFUGEE Portfolio EMERGENCY BEDCO by March NaTakallam Tawlet Souk el Tayeb NGO ShareQ B.O.T FabricAID L’Artisan du Liban (ADL) Lebanese Alternative Learning (Tabshoura) SE Factory

EGYPT

SUSTAIN Portfolio

SEED Cycles SUSTAIN Portfolio Green Employment SEED Cycle Plastics Recycling SEED Cycle Bright Tomorrow for Powered by SODIC Funded by Dow Chemicals, Child Protection Banlastic Powered by Wasteaid (BTCP) Bekia Upfuse Future Eve Kendaka Very Nile Foundation Plstka Technology WMC Man Ahyaha Delta Oil

PALESTINE

SEED Cycle SUSTAIN Portfolio EMERGENCY Inaugural Palestine SEED Cycle Flowless Egyptian Food Bank Powered by Alfanar & The Asfari Foundation Al Mofakir For Education Al-Reef Fair Trade Flowless Friends of Birziet Sawaed 19 Sindyan Education Media Spark for Entrepreneurship & Innovation Yalla Mishwar Tourism Waselat Al Muffaker JORDAN SEED Cycle SUSTAIN Portfolio Impact Together B.O.T Funded by the European Union FabricAID (EU), Powered by Impact Europe Curio Hands of Sitti Jusoor Labs Ketabi KUVRD

Alfanar 2023 Annual Report | 6

Venture Philanthropy Approach Venture Philanthropy Approach

For nearly two decades, Alfanar has continued to adapt its approach to effectively fuel social enterprises in the Arab world.

2023 marked the second year of Alfanar’s new investment cycle: SEED, SUSTAIN, SCALE, and SPREAD. We set ourselves four ambitious goals aimed at extending our reach and venture philanthropy support to a growing number of social enterprises across the Arab region.

Our refreshed approach enables us to provide more social enterprises access to our accelerated SEED cycle training, grants and personalised management support. From this larger pipeline, we can provide select social enterprises with business planning and assessment for our unique, multi-year SUSTAIN support package.

Investment Cycle

SEED

6-8 months of accelerated Alfanar Sustainable Social Enterprise Training (ASSET), financial awards and business planning

SUSTAIN

3-5 years of patient, flexible grants and zero-interest loans, management support and bespoke Alfanar Impact Management (AIM) applications and analytics

SCALE

5+ years of debt and equity impact investment, providing investors with financial return or social franchising support, technical assistance and access to networks

SPREAD

A community of supporters, donors and ambassadors growing the sustainable change movement in social entrepreneurship and impact investment across the Arab world

Alfanar 2023 Annual Report | 7

SUSTAIN Support Package

Tailored Funding

Adaptable and patient capital spanning 3-5 years (often +£250K), which provides social enterprises with the stability required to concentrate on expanding and enhancing their impact and financial sustainability models

Management Support

Highly engaged accountability support and training, study missions and market exploration trips, business planning and reforecasting, and access to our vast network of impact connectors. This ensures social enterprises have the expertise and support needed to grow and expand

AIM

Alfanar Impact Management is our programme that develops and adapts tailored applications for each social enterprise on a business intelligence technology platform – enabling real-time tracking, visualisation and progress assessment against impact and financial targets

A Unique Model for Lasting Impact

Financing is crucial, but is not enough on its own.

Our commitment to providing long-term, comprehensive management support and training for social enterprises is the glue to our model and what sets us apart in the venture philanthropy space.

For every £1.00 donated to Alfanar, we add £0.63 in one-on-one management support and capacity-building to our social enterprises, which includes weekly accountability calls, monthly in-person visits, networking connections, training and business planning. This ensures that our collective contribution is not only impactful, but long-lasting.

Alfanar 2023 Annual Report | 8

Commitment to Financial Sustainability

Alfanar promises its partners and donors that their philanthropic donations will be strategically directed, monitored and cultivated to foster the emergence of lasting solutions in education, youth employment, women’s economic empowerment and the environment. Through our venture philanthropy support, we accelerate our social enterprises’ progress toward financial selfsufficiency over the life of our investment cycle. We do this through tailored funding, proactive target setting, focused management support, progress tracking and dynamic course-correcting, when needed. It is not enough to set and strive towards financial sustainability targets. We have realised over time that part of our role is to facilitate collaboration, reseller and social procurement opportunities for our social enterprises that enable the growth of self-generated revenue. Alfanar takes social enterprises in its portfolio on market exploration missions to encourage such connections with regional and international companies.

Thanks to our partnership with the fund for micro-, small and medium-sized enterprises SANAD, we led a market exploration mission in June 2023 to Riyadh, Saudi Arabia, taking five Lebanon portfolio social enterprises: Bridge. Outsource. Transform (B.O.T), SE Factory, LAL/Tabshoura, L’Artisan du Liban and FabricAID. Ahead of the mission, we helped the enterprises assess their export readiness, strengthen e-commerce strategies, and eventually connect with relevant stakeholders at our Inaugural Riyadh Impact Connector Event, for which we were grateful to receive venue support from the King Khaled Foundation. Since 2004, Alfanar has disbursed £7,893,296 in tailored funding – grants, zero-interest loans – to our social enterprises. This funding has enabled our social enterprises to self-generate £17,961,427 in revenue through the sale of their own goods and services – more than double our strategic, philanthropic contribution.

In 2023, our social enterprises were able to recover 66% of their costs, on average, through the sale of their own goods and services. This highlights the power of our venture philanthropy approach, which shifts social enterprises, built by and for the Arab region, away from donor dependency and instead towards self-reliance and lasting change.

Grants vs Self-Generated Revenue

----- Start of picture text -----
Non- Alfanar Grants Alfanar VP Grants Self Generated Revenue
8,000,000
6,000,000
4,000,000
2,000,000
0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
----- End of picture text -----

The graduation of SUSTAIN social enterprises coupled with fluctuations in the

value of the EGP led to a dip in total sales achieved in 2023.

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Alfanar 2023 Annual Report | 10

ASSET

Alfanar Sustainable Social Enterprise Training

Budding enterprises in the Arab region are often resource-limited and need technical assistance to scale their enterprises for change. Our ASSET programme equips social enterprises in both SEED and SUSTAIN cycles across Egypt, Lebanon, Jordan and Palestine with the tools needed to grow their impact and financial sustainability.

ASSET Modules

We deliver our twelve ASSET training modules through a mixture of group trainings and one-on-one mentorship to ensure that each social enterprise has outputs that are tailored and applicable to its needs.

Alfanar also works with foundations and corporate partners that are interested in delivering ASSET training to social enterprises outside of our portfolios.

AIM

Alfanar Impact Management

For our SUSTAIN social enterprises, Alfanar develops tailored digital applications that streamline the monitoring of social impact and financial sustainability targets. Our AIM solution improves efficiency and reduces the burden of reporting for our social enterprises, turning what used to be an obligation into an essential evidence-based decision-making, management and communications tool.

75%

88%

Of social enterprises in 2023 indicated that AIM helped them make better management decisions

Of social enterprises confirmed that AIM improved their performance

Alfanar 2023 Annual Report | 11

The financial support we received allowed us to focus on our revenue generation strategy, providing us with greater clarity and direction.

Clementine Brown Co-Founder, CodeBrave Alfanar Lebanon SEED Portfolio

Alfanar 2023 Annual Report | 12

Impact Investing

In 2023, Alfanar continued to support the launch of one of the first impact investment funds focused on the Arab region.

Building on 20 years of venture philanthropy in the region, the impact investment fund aims to empower visionary entrepreneurs who use their businesses to create a more sustainable and inclusive future for disadvantaged communities, especially for women, youth and children.

Set to launch in 2024, the fund’s impact investment strategy aims to generate commercial returns for investors while maximising positive and measurable social and environmental impact. It will invest in ambitious, growing businesses with impact, making available multiple financial instruments, including equity, debt or hybrids. In addition to investment capital, the fund will make available non-dilutive technical assistance support to help these businesses strengthen and scale their impact, operations and revenue.

In 2023, Alfanar supported the strengthening of the impact investment fund’s leadership team, honed its investment strategy and legal structure, and grew the regional pipeline of growth-stage businesses with impact using a gender lens investment focus, including the preparation of first investments. Additionally, Alfanar approved a further convertible loan to one of our investees, FabricAID, and its network of ecosystem partners; its appearance on Bahrain’s Beban Show (an entrepreneur-themed reality TV show); and follow-on investment from other regional funds.

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Alfanar 2023 Annual Report | 14

2023 Portfolio

Despite the challenging landscape of 2023, our social enterprises remained resolutely focused on their social and environmental missions.

As a result of this commitment, Alfanar’s social enterprises directed improved the lives of 107,152 children, youth and women within the year, delivering quality education, youth employment, women’s economic empowerment and environmental innovation.

EDUCATION

Ensuring equitable education that fosters continuous learning

Since inception, improving access to quality education for disadvantaged children has been a key part of Alfanar’s mission. With over two-thirds of the Arab region’s 50 million children grappling with ‘learning poverty’, or the inability to read and comprehend an ageappropriate text by the age of 10, Alfanar is committed to identifying, funding and fuelling social enterprises growing sustainable solutions that provide disadvantaged children access to quality education. In 2023, with generous support from SODIC, a private foundation, and individual donations, Alfanar’s education social enterprises in Egypt and Lebanon enabled nearly 10,000 children to access equitable educational pathways.

SEED

Impact Together SEED Cycle, Funded by the European Union (EU), Powered by Impact Europe & Implemented by Alfanar*

Curio - Supporting women entrepreneurs in underserved areas to establish preschools.

Jusoor Labs - Enabling students from all backgrounds to access an interactive learning platform that teaches science lessons, including virtual experimentation that reduces reliance on expensive equipment and laboratory spaces.

Ketabi- Establishing a secure online learning space for children that optimizes screen time for educational advancement.

Palestine SEED Cycle, Powered by Alfanar & The Asfari Foundation

Friends of Birzeit - Enabling Palestinian students to reach tertiary education through scholarships and fellowships.

Sindyan Education Media - Creating and distributing educational digital content to children aged 4-9.

Waselat Al Muffaker - Developing educational tools and materials for children with special needs, and training both instructors and parents on how to use their systems and products.

*For some of our projects, our funding partner works with an organisation/entity that powers the project by providing management support and oversight.

Alfanar 2023 Annual Report | 15

SUSTAIN

Egypt

Bright Tomorrow for Child Protection (BTCP)

Based in Alexandria, BTCP provides comprehensive learning resources and services to children with neurodevelopmental disorders, with a particular focus on children with autism. Since 2018, Alfanar has helped BTCP grow its reach, especially within disadvantaged communities in Alexandria, where there are now three operating centres. In parallel, Alfanar helped BTCP create and execute a business plan aimed at developing self-generated revenue streams to ensure the long-term sustainability of its work. Having helped BTCP directly train and employ 85 therapists, treat 2,148 children with neurodevelopment disorders, and achieve 86% cost recovery through cross-subsidisation, Alfanar exited BTCP in 2023.

Cost Recovery 84%

2023 Social Impact 536 Children

Man Ahyaha (MA)

MA aims to leave no child without education by building and running high-quality primary community schools in rural communities where no schools or government exist. Alfanar began its support of MA in Q4 2023, enabling the organisation to continue improving its two community schools in the Ayat, Giza area and to add a third community school in Sohag. MA trains and employs local members of the communities it operates in to serve as educators, facilitators and other school staff. In parallel, Alfanar is supporting MA to test, SUSTAIN identify and grow at least one self-generating revenue stream within its current business plan as a way of ensuring financial independence in the long run.

2023 Social Impact: 385 children enrolled & 88 teachers trained

*Cost recovery figures are not included for SUSTAIN social enterprises that were approved mid-year and have not yet completed one full year of Alfanar support. These figures will be reported in the 2024 report.

Alfanar 2023 Annual Report | 16

SUSTAIN

Lebanon

Lebanese Alternative Learning (LAL) Tabshoura

Since 2020, Alfanar has supported LAL to digitise and make the entire Lebanese primary curriculum available in Arabic, English and French to all children enrolled in school in Lebanon. This long-term goal was finally achieved in 2023 when LAL signed a Memorandum of Understanding with the Ministry of Education. Alfanar has also helped LAL develop and grow its revenue-generating education consulting services through LAL Solutions, facilitating useful connections through the Riyadh Market Exploration Mission.

Cost Recovery 28%

2023 Social Impact: 8,896 students & teachers

Palestine

In response to the horrifying loss and devastation endured by children across Gaza and increasingly children in the West Bank as well, Alfanar is bringing together a consortium of education social enterprises, including LAL/Tabshoura and others, to digitise the Palestinian primary school curriculum.

We are proud to bring together and leverage the expertise of our social enterprises to begin responding to the overwhelming need of children denied basic rights, including learning, across Palestine.

Alfanar 2023 Annual Report | 17

Impact Highlight I Man Ahyaha

“I strive to create a supportive and inclusive classroom environment where every student feels valued, understood, and capable of reaching their full potential.”

We had a child named “Youssef” at our school who was very active and often got into fights. Eventually, I discovered that the violence he displayed stemmed from a difficult home enivornment.

I continued to engage with Youssef, asking him about his interests. Noting his physical abilities and flexibility, I began teaching him gymnastics, which he enjoyed and even started teaching others in the community.

With time, he became calmer, more focused, and his academic performance improved.

Man Ahyaha trains us to prioritise building strong connections with the children in our classrooms. Because of this, we are able to help students express their needs, gain confidence and thrive socially as well as academically.

This impact extends beyond the classroom, thanks to Man Ahyaha’s focus on building community networks. Parents see themselves as partners in their child’s education, reinforcing lessons learned at school and passing them to other family members.

Being able to bring education to children while empowering our community makes me proud, and gives me hope for the future.

*Teacher testimonial

Alfanar 2023 Annual Report | 18

EMPLOYMENT

Promoting economic growth through equitable opportunities for employment

With the highest youth unemployment rates globally – at 47.8% in Lebanon, 41.6% in Jordan and 42% for young women in Egypt – it is imperative to invest in lasting solutions across sectors that generate meaningful employment and livelihoods for the 100 million young people living in the Arab region.

Alfanar works to identify and support bold social enterprises that are upskilling, training, and creating access to steady and dignified employment opportunities for the region’s youth. In 2023, with generous support from GIZ, Drosos, L’Oreal and private individual donors, Alfanar’s SUSTAIN employment portfolio generated steady jobs and livelihoods for 479 youth, of which 269 (56%) were women.

SEED

Lebanon YELA (Youth Employment For Lebanon), Powered by GIZ

1st Cycle

Beirut Bloomers - Supporting local artisans across Lebanon through funding, marketing, resale and design support.

Find A Nurse - Facilitating employment for qualified home care providers.

Nadeera - Enabling municipalities to reduce waste management costs by restoring value in discarded materials and alleviating health and environmental issues through waste management plans.

Plastc Lab - Upcycling plastic waste into valuable and educational items.

Siira - Providing accessible mental health support to vulnerable communities.

2nd Cycle

Agonista - Economically empowering individuals with different needs by providing them with safe and steady employment in their coffee shops.

Code Brave - Delivering classes in coding, robotics and other techrelated topics to teachers and students.

Little Melly - Providing meals for children between 6 months to 6 years through subscriptions and pharmacies.

Refuse- Offering community-based waste management services and creating employment for those in need.

The Volunteer Circle - A skill-sharing platform that matches volunteers with NGOs, start-ups, and local businesses.

Alfanar 2023 Annual Report | 19

SEED EMPLOYMENT

Cultivating gender equality within impoverished communities

3rd Cycle

D4Communities - Creating public and communal spaces that provide dignity, shelter, and security for local communities across Lebanon.

Espace Fann - Democratising art education in Lebanon by making it accessible and affordable for all.

Foodsight - Connecting agro-food businesses with multinational freelance experts and international service providers through an online marketplace.

IRAP - Specialising in the educational care and social integration of deaf children and young people.

UDiversity - Providing vocational training in cooking, food packaging, hospitality, character building, and social communication skills.

4th Cycle

Ahla Fawda - Promoting circular economic and eco-awareness, offering waste processing services and running green educational outreach.

Garbaliser - Addressing the environmental issue of excessive chemical fertiliser use by creating a natural liquid fertiliser from organic green waste.

Littera - Bridging educational gaps by creating accessible and engaging learning lessons.

Supportful - Reducing brain drain across Lebanese by connecting youth to remote software engineering jobs with international tech companies.

UWYTA - Creating work opportunities for vulnerable women in upcycling.

Jordan Education and Employment SEED Cycle, Funded by the EU, Powered by Impact Europe

KUVRD: Economically empowering Palestinian and Syrian refugees to design, produce and sell apparel that features and celebrates their local culture and heritage.

SUSTAIN

Lebanon

Bridge.Outsource.Transform (B.O.T)

The first impact outsourcing platform in the Arab region is enabling youth from low-income communities to access digital freelance work, including specialist work in artificial intelligence data annotation in Arabic. With Alfanar’s support, B.O.T has expanded its operations from Lebanon to Jordan and is proactively developing its business contracts in the Gulf and beyond.

2023 Social Impact 337 youth employed (64% women)

Cost Recovery 81%

Alfanar 2023 Annual Report | 20

SUSTAIN EMPLOYMENT

Cultivating gender equality within impoverished communities

SE Factory

SE Factory provides intensive coding bootcamps to underprivileged youth across Lebanon, enabling them to develop the skills needed to secure steady employment in full stack web development and coding. Following bootcamp graduation, SE Factory facilitates employment opportunities with corporates in Lebanon and beyond. With Alfanar’s support, SE Factory has not only created introductory trainings, but has also developed new streams of self-generated revenue through HR Factory, a specialised back-office service.

Cost Recovery 34%

2023 Social Impact 283 youth employed & trained

BEDCO

BEDCO is a social enterprise that economically empowers and employs marginalised youth from Jabal Mohsen and Bab el Debbaneh (neighbouring areas in the Tripoli area that are often embroiled in confessional violence and tension) through training and income-generating opportunities, especially in the construction sector. In addition to growing the number of work opportunities for youth, Alfanar is supporting BEDCO to improve cost recovery through sales, to develop an adaptable training programme, and to create a digital impact management system to better monitor performance.

2023 Social Impact 75 youth trained & employed

Cost Recovery 22%

NaTakallam

NaTakallam is creating dignified employment for refugees through the online economy as Arabic-language translators, interpreters and conversation partners. Since 2016, Alfanar has supported NaTakallam’s growth and assisted with the development of a new digital platform.

Cost Recovery 101%

2023 Social Impact 34 refugees employed

ProAbled

Alfanar has supported ProAbled since 2022 to advance disability rights through a twofold approach: an online academy specialising in disability inclusion training, and a recruitment platform dedicated to facilitating employment for individuals with disabilities.

2023 Social Impact Cost Recovery 128 people employed & trained 13%

Alfanar 2023 Annual Report | 21

Impact Highlight I ProAbled

Mazen refuses to let his multiple sclerosis (MS) diagnosis stop him from pursuing his goals.

As a husband and father of two, Mazen is determined to provide for his family. However, the combination of a difficult job market, especially in the wake of Lebanon’s economic crisis, and the impact of MS has frequently left him jobless.

By connecting with ProAbled, Mazen found hope and new opportunities for his career.

ProAbled is a social enterprise that advances disability rights through an online academy specialising in disability inclusion training, as well as a recruitment platform that facilitates employment for individuals with disabilities.

Thanks to ProAbled, Mazen was able to obtain dignified employment and provide for his family. Beyond securing employment, ProAbled has empowered Mazen to advance his career goals and feel supported and accepted in the workplace.

Alfanar has supported ProAbled since 2022 as part of our GIZ-funded employment portfolio. The social enterprise has received funding and technical assistance through our ASSET training programme, alongside business development support. In 2023, ProAbled employed and trained 128 individuals across Lebanon, and our support will help the enterprise as it continues to lead disability inclusion efforts in the country and the wider Arab region.

Alfanar 2023 Annual Report | 22

EMPOWERMENT

Cultivating gender equality within impoverished communities

Despite certain advancements for women’s employment in the Arab region, especially in the fields of science, technology, engineering and maths (STEM) and entrepreneurship, steep barriers remain. The lack of women in formal employment continues to hamper economies, with only 29% of women formally employed in Lebanon, 18% in Palestine, 16% in Egypt and 13% in Jordan. Alfanar fosters the growth of social enterprises that enable women to access steady income-generating opportunities and dignified employment. In 2023, thanks to the continued belief and support of The Global Fund for Widows, the Egyptian Refining Company (ERC) and private individuals, Alfanar’s SUSTAIN empowerment portfolio improved the take-home income and livelihoods of 4,143 women and their families, of which 3,698 were widows and female breadwinners.

SEED

Jordan Education and Employment SEED Cycle, funded by the EU, powered by Impact Europe

Hands of Sitti - Developing fashion product lines, from embroidery to soaps, that create dignified employment within refugee and displaced communities.

Palestine Inaugural SEED Cycle, powered by Alfanar and The Asfari Foundation

Al-Reef for Agriculture - Economically empowering female farmers through cooperative agriculture production and fair-trade promotion.

Sawaed 19 - Matching young people with volunteer opportunities across Palestine..

Spark for Entrepreneurship & Innovation - Supporting farmers in Gaza and beyond to adopt smart, sustainable farming methods.

Yalla Mishwar Tourism - Promoting and growing ethical tourism in Nablus.

Alfanar 2023 Annual Report | 23

SUSTAIN

Cultivating gender equality within impoverished communities

Egypt

Future Eve Foundation (FEF)

Since 2012, Alfanar, The Global Fund for Widows and FEF have worked together to establish, develop and grow The Amal Project for Widows’ Empowerment across 108 villages in Egypt, reaching over 22,000 widows. Meaning ‘hope’ in Arabic, The Amal Project is a multi-faceted programme, implemented by FEF, that aims to economically empower widows and female breadwinners through financial and vocational training, access to social microfinance and participation in Widows Savings and Loan Associations (WISALAs). FEF has expanded its reach significantly and with Alfanar’s support, has strengthened its financial management and developed more effective monitoring and impact measurement systems. In 2024, support from an implementation consortium will allow Amal to reach widows in additional governorates in Egypt and in new countries, namely Lebanon and Palestine.

2023 Social Impact 3,689 widows & female breadwinners

Cost Recovery 120%

Lebanon

L’Artisan du Liban

One of Lebanon’s oldest social enterprises, ADL aims to economically empower disadvantaged local artisans, most of whom are women, by facilitating more sales of their handmade textiles and accessories. To date, ADL has supported more than 1,000 artisans across Lebanon, mostly located in remote rural areas, and has saved four crafts from extinction. In addition to enabling ADL to support more artisans from disadvantaged communities, Alfanar is also providing management support to strengthen the organisation’s long-term financial sustainability.

Cost Recovery 96%

2023 Social Impact 134 artisans employed

Alfanar 2023 Annual Report | 24

Impact Highlight I Hands of Sitti

“Working with Sitti Saop was a defining moment for me. They helped me stand firmly and become self-reliant.”

Often shy at first, Muna reveals her extroverted side once you ask her about her work. Her enthusiasm is clear as she discusses her daily tasks and the community she works with.

Muna is 50 years old and is a soap artisan for Hands of Sitti. As the breadwinner for her family of 10, and without Jordanian citizenship, working with Hands of Sitti has enabled her to provide a dignified life for herself and her family.

Hands of Sitti is a social enterprise that aims to empower refugees through income generation and fair work opportunities through the creation of bath and body products, apparel and other collections. Refugees are given training and employment that can help them attain financial security.

In 2023, Alfanar welcomed Hands of Sitti to our first SEED Cycle in Jordan, powered by Impact Europe and funded by the EU. Over the course of several months, Hands of Sitti, alongside four other social enterprises, were equipped with the tools and training needed to scale their impact, strengthen their operations and grow their financial sustainability.

With Alfanar’s training, Hands of Sitti has increased their impact and ability to support refugee and displaced communities.

*Pseudonym used

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Alfanar 2023 Annual Report | 26

ENVIRONMENT

Fostering the establishment of eco-friendly consumption and production patterns

The Arab world is facing significant climate change impacts, with temperatures increasing higher and faster than the global average, and more frequent heat waves threatening crop production and food security. The region is also the most water-stressed in the world, consuming more than it can currently replenish.

In response to these challenges, Alfanar has been backing frontline social enterprises that recognise the imperative for both a social and environmental response to climate impacts. In 2023, we had support from private individuals, SODIC, The Asfari Foundation, the SEMD Programme – powered by GFA Consulting and the Swiss Development Corporation (SDC), WasteAid and Dow Chemicals, GIZ. Our SUSTAIN environmental portfolio recycled 84 tonnes of used clothing, which resulted in a CO2 emission reduction of 302 tonnes. In turn, the lives of 71,380 vulnerable individuals were improved through employment and access to affordable recycled goods. Additionally, we launched our first SEED cycles focused on identifying and supporting green social enterprises benefiting disadvantaged communities, paving the path for increased venture philanthropy support in this area.

SEED

Egypt Plastic Recycling Opportunities (PRO) Cycle, Powered by WasteAid & Dow SUSTAIN Chemicals

Upfuse - Transforming disposed plastic and other waste into high-end products.

VeryNile - Creating up-cycled products, such as pouches and laptop sleeves, from PET single-use plastic bags that are donated from households or collected from the Nile.

Waste Management Control (WMC) - Developing and deploying smart solutions that help people generate income and understand the importance of recycling.

Egypt Green Employment SEED Cycle, Powered by SODIC

SUSTAIN Banlastic - Rewarding customers for recycling their solid waste through an app, with discount coupons on services like restaurants and medical services. Bekia - Reducing carbon emissions by teaching families how to sort waste from landfills. SEED Kendaka - Upcycling glass, used-plastic, weaving and textile-crochet into functional and creative products. Plstka Technology - Rewards customers for recycling their solid waste through an app, withPowered by GIZ discount coupons on real services like restaurants and medical services.

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SUSTAIN

Lebanon & Jordan

FabricAID

Originally established in Lebanon, now growing in Jordan and exploring expansion opportunities to Bahrain and Saudi Arabia, FabricAID is now the largest second-hand clothing collector in the Arab region. It works to ensure that every family can afford decent, quality clothing and that the fashion industry reduces its negative impact on society and the environment. FabricAID resolves inefficiencies in the second-hand clothing market by improving the efficiency of used clothing donations, resale, exchange and upcycling through multiple offerings, namely thrift, barter, vintage shops and an upcycled brand. Since 2018, Alfanar’s grant, equity and convertible loan financing coupled with management support has enabled FabricAID to scale from a team of 9 to 143, from serving 1,088 to over 71,380 clients, paving the way for impact investment and further impact and sales growth.

2023 Social Impact 143 employed & 71,380 customers

Cost Recovery 42%

FabricAID Spotlight: The Beban Show

Represented by Egypt Country Director Shenouda Bissada, Alfanar served as a judge on entrepreneurship-themed reality TV show The Beban Show. The third season, episode 9, aired on 6 March 2024, featuring Alfanar as a social enterprise and FabricAID as a contestant pitching for further investment. Alfanar confirmed its investment during this episode and helped encourage further investment from The HOPE Fund to support FabricAID with the expansion of their operations to Bahrain.

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SUSTAIN

Egypt

Delta Oil

Delta Oil collects used cooking oil (UCO) from disadvantaged SEED communities across the Alexandria and The Delta in exchange for payment, food baskets or social services after selling the UCO to biodiesel companies. Alfanar progressed Delta Oil to business planning and approved long-term SUSTAIN funding in Q3 2023. This will enable the social purpose company to expand across Egypt, employing 3,000 disadvantaged women as local collectors and, in turn, enabling over 300,000 families to access additional income and food packages in exchange for UCO. Alfanar is supporting Delta Oil to develop a transformation plan and a monitoring and evaluation framework that will help them to accurately measure their social impact over the life of the investment

"With ou r help, women in rural areas are learning about the importance of recycling used cooking oil, the proper use and disposal of cooking oil, and participating in a sustainable project that economically empowers them and supports the environment." - Sherif Foda, Alfanar Trustee

Palestine

Flowless

Flowless is headed by an innovative team that is tackling climate change while empowering vulnerable communities. It has devised a hardware/software solution that helps smallholder farmers and municipalities detect and reduce water leakages through greater knowledge and adjusted behaviour. Alfanar’s long-term SUSTAIN support, approved in Q3 2023, aims to scale the organisation’s impact and sales.

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Impact Highlight I Flowless

Located in the West Bank, Salfeet’s population has grown to over 15,000 residents, putting significant stress on the town’s main water supply, the Salfeet Municipality Water System.

The current system has been dependent on human intervention for site inspection, particularly in monitoring water quality and consumption tracking. This has led to inefficient and delayed operations, underscoring the need for automation.

Flowless is a social enterprise that has created a smart system to monitor water supply and control operations. This automated system collects realtime data on water supply and water quality, monitoring water flows for active leak detections and controlling pump operations and reservoirs.

Thanks to the successful implementation of the Flowless system, Salfeet has managed to decrease losses in their water network, saving 10 million litres of fresh water monthly.

Alfanar supported Flowless through its Inaugural Palestine SEED Cycle in 2022/23, enabling them to scale their impact and strengthen operations. In 2023, Alfanar approved Flowless for multi-year SUSTAIN support, where we will help the team to scale and better track and assess their impact while growing sales in Palestine, Jordan and beyond.

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EMERGENCY

Lebanon

In 2023, Alfanar made the final disbursements to Souk Al Tayeb and ShareQ as part of the culmination of our Emergency Lebanon Appeal. The appeal was originally set up to provide emergency support, reconstruction support and hunger relief to the thousands of families who were displaced and impacted by the 4 August 2020 Beirut Port explosion. Subsequently, the campaign was able to lengthen the duration of its support to families thanks to coordination with a private foundation. Together, support to these social enterprises enabled the delivery of 278,684 hot and vacuum-sealed meals, 2,520 food boxes as well as the creation of 66 kitchen staff positions and 67 food distribution jobs.

Palestine

Since the end of 2023, Alfanar has endeavoured to build a coalition of partners committed to responding to the humanitarian crisis in Gaza as well as the increasing difficulty faced by women, youth and children in the West Bank.

“In the face of unimaginable human suffering as we have seen unfold in Gaza for many months, it is imperative that we in the sustainable development space bring to bear our networks and capacities to respond,” – Myrna Atalla, Executive Director.

We are proud to have partnered with our 2023 zakat donors and Osman Consulting and to work with the Egyptian Food Bank to provide 6,464 families in Gaza with dried food and water boxes. Our two shipments were delivered on 25 November 2023 and 28 February 2024.

By the end of the year, we were incredibly dismayed that four of the eight social enterprises we had worked with during our 2022/23 Palestine SEED cycle had ceased operating. To help salvage and sustain the social enterprise ecosystem across the West Bank, we began developing an Emergency Support Programme for Social Enterprises to deliver crisis management and reforecasting support to social enterprises whose operations have been disrupted.

Leveraging Alfanar’s focus and experience in children’s education, we are bringing together a consortium of education social enterprises to help digitise the Palestinian primary school curriculum, pilot its use in the West Bank and prepare for further dissemination as soon as it is possible to do so with children in Gaza. We will be working with funding partners in 2024 to fund and deliver this programme as efficiently and as effectively as possible.

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OUTREACH

In 2023, Alfanar participated in numerous conferences, interviews and public engagements aimed at building awareness of social investment and growing the venture philanthropy movement in the Arab region.

Notable highlights included:

Alfanar’s practical experience in supporting social enterprises in the Arab region to overcome a myriad of challenges and achieve lasting impact was further on display in podcasts with The Impact Room and Amaly Legacy and in articles published by The Innovating Justice Fund, Machine Lab, Egon Zehnder and Barclay’s Guide to Giving. Links to these discussions and publications are available on Alfanar’s website.

Alfanar Executive Director Myrna Atalla speaking at an Impact Europe panel about how venture philanthropy can address the needs of communities during times of crisis, and the value of investing in a long-term strategic approach.

Over 70 stakeholders joined our Executive Director, Myrna Atalla, at The Conduit in London for a discussion on Alfanar’s 20-year journey driving sustainable impact in the Arab region through venture philanthropy.

ITRA EWS A* YAJ I eroe es

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LUMINARY INTERNSHIP PROGRAMME

We hosted our third cohort of Luminary interns in 2023, enabling motivated high school students to work with Alfanar and our social enterprises during the summer. As we continue to grow, our aspiration for SPREAD is to cultivate powerful voices that not only advocate for Alfanar’s current initiatives, but also strengthen the capacity and promise of social entrepreneurship for years to come. The Luminary Internship is a competitive programme that provides high school students with an opportunity to learn about venture philanthropy, social enterprise and impact investment in the Arab region.

In 2023, Alfanar welcomed six Luminary interns across our teams in London, Beirut, Cairo and Amman.The interns worked virtually and in-person on projects related to fundraising, communications and research in the social enterprise space.

We would like to thank our 2023 Luminary Interns: Haddy, Jad, Layan, Rayan, Sofia and Yara for their support and commitment.

Luminary Testimonial

“I just completed my Luminary internship with Alfanar in Lebanon. It was incredible to say the least – from the people I was surrounded by, to the projects I was given.

I was exposed to multiple experiences that deepened my knowledge in social entrepreneurship. I learned so many things about how social enterprises run and how they remain resilient through hardship.

I would recommend this internship to anybody around my age, 17 or older, who is interested in gaining experience in the social entrepreneurship ecosystem.”

Looking Ahead: In 2024, we will be accepting more Luminary interns to the programme, with an in-person offering for thoe based in London in addition to virtual positions for those in the region.

– Rayan, 2023 Luminary Intern

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2023 RESULTS

Structured for Growth

In line with the ambitions of Alfanar’s 2022-2026 plan, efforts were made to grow the team and strengthen internal culture, communication and coordination. We completed the recruitment of 3 positions – a new Lebanon Director, Head of Finance and Communications Manager. Strategically growing Alfanar’s team will enable greater internal efficiency and the achievement of impact and outreach targets. Additionally, with venue sponsorship from The Asfari Institute for Civil Society and Citizenship at The American University of Beirut, we held our first in-person team retreat since 2019 to revise key processes and encourage team alignment. In parallel, we began working on a streamlined family structure between Alfanar subsidiaries and affiliates. Our registration of a branch of the UK charity in Jordan was also approved in 2023.

Accelerated Reach through SEED Cycles

We ran 2 SEED cycles in Egypt (7 social enterprises), 4 in Lebanon (20 social enterprises), launched our first in Jordan (5 social enterprises) and completed our inaugural SEED cycle in Palestine (8 social enterprises) – building the capacities of 40 new social enterprises, up from 18 in 2022. 6 of these SEED enterprises progressed to business planning, and 3 were endorsed by the Investment Committee and approved by the Board for long-term SUSTAIN support.

Grew Impact through SUSTAIN

Alfanar directly improved 107,152 lives through 13 SUSTAIN social enterprises and emergency support in Lebanon and Gaza, representing a 11% increase from 2022. Our SUSTAIN portfolio generated £3,563,790 through the sale of goods and services. In 2023, the portfolio recovered an average of 66% of costs through self-generated revenue.

SCALED through Replication and Impact Investment

In 2023, Alfanar, the Global Fund for Widows and Future Eve Foundation began expanding the Amal Project for Widows Empowerment further across Egypt, enabling an additional 3,689 widows and female breadwinners across 108 villages in five governorates to set up their own businesses. With support from The Ford Foundation, we will document the social franchise manual for The Amal Project to guide further expansion in and beyond Egypt. Alfanar also helped advance pre-start-up steps for impact investment fund we are supporting the launch of, including legal and governance structure, recruitment of a Head of Investments and approval of an additional convertible loan investment.

SPREAD Venture Philanthropy across the MENA Region

Alfanar was featured in more podcasts, articles, and conferences in 2023. We held a teach-in on venture philanthropy and impact investment in the Arab region in partnership with The Conduit London, as well as our first Impact Connector event in Riyadh, Saudi Arabia. These outreach efforts helped build interest in and eventual support for Alfanar’s venture philanthropy work across the Middle East and North Africa.

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2024 PLANS

In line with Alfanar’s 2022-2026 growth plan, Alfanar aims to achieve the following:

Strengthen the Foundations

Alfanar will complete an organisational mapping exercise to identify strengths and challenge areas within our governance and operating model and to lay out a plan for improving operational efficiency. Alfanar will send key staff from the investments team to become Global Reporting Initiative (GRI)-certified to strengthen our impact reporting and processes to ensure that we consistently meet external requirements.

Increase Reach through SEED Cycles

Alfanar aims to provide SEED support to 57 social enterprises across Egypt, Lebanon, Jordan and Palestine to continue strengthening the social enterprise ecosystem while building Alfanar’s pipeline.

Grow Impact through SUSTAIN Support

In 2024, we aim to reach towards impacting 150,000 women and children through longterm SUSTAIN funding and support to at least 15 social enterprises. We look to increase our reach and impact in Egypt, Lebanon, Jordan and Palestine, to disburse +£1.5M in grants, with an additional £1m in management support provided to social enterprises.

SCALE through Replication or Impact Investment

We are looking to expand The Amal Project for Widows’ Empowerment further in Egypt, and to Lebanon and Palestine over the coming three years. This will constitute a blueprint for future regional expansion through social franchising. We hope to support the launch of the first regional impact investment fund in 2024.

SPREAD Alfanar’s Venture Philanthropy Approach

We will revise our fundraising strategy with the aim of reliably doubling income and impact within two years. Key to our fundraising in 2024 will be the delivery of a successful 20th Anniversary Leading the Change Gala in the summer of 2024. We will also develop a communications and outreach strategy to align messaging across all parts of the organisation. Finally, we aim to partner with the Arab Foundations Forum to hold a teachin on venture philanthropy with peer foundations.

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With Alfanar’s support, we have b een ab le to support widows and female readwinners in seven governorates across Egypt.

Awny Mehany Amal Manager, Future Eve Alfanar Egypt SUSTAIN Portfolio

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FINANCIAL REVIEW

In the year ended 31 December 2023, Alfanar raised £2,452k (2022: £2,504k). This represents a slight 2% decrease compared to prior year results, which is in part due to the fact that Alfanar did not host a Gala dinner within the year, but is hosting its next one in honour of its 20th anniversary in 2024.

We recognise and appreciate the generous support received from our Boards, with unrestricted donations of £165k, (2022: £323k), and the support of other individuals with unrestricted donations of £307k (2022: £344k). Additionally, we are grateful for the continued support of our affiliate Alfanar, Inc., US, which supported our venture philanthropy mission with £130k (2022: £56k). Together, these sources covered the Charity’s fundraising and support costs in 2023, thus enabling any additional donations raised to be directed towards Alfanar’s SEED awards, SUSTAIN grants, ASSET training AIM and other management support delivered to our social enterprises working to improve education, employment and economic empowerment to vulnerable children, youth and women.

Alfanar received significant support from corporate and institutional donors in 2023, including from Drosos, Egyptian Refining Company (ERC), Ford Foundation, GIZ, Global Fund for Widows, Impact Europe, L’Oreal, Osman Consulting, SODIC and WasteAid. Corporate donors provided Alfanar with £424k (2022: £182k), while institutional donors provided £1,434k (2022: £788k).

In 2023, resources expended amounted to £2,473k (2022: £2,053k), an increase of 20%. Of this amount, direct grants to social enterprises rose by 27% to £1,026k (2022: £807k). This is attributed to the transition in 2022 to Alfanar’s revised investment cycle, which introduced SEED cycles. These new cycles enable Alfanar to work with more social enterprises while building up the pipeline for new SUSTAIN grantees following significant exits from our portfolio.

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2023 INCOME
TOTAL: £2,453K
8% 7%
5% 5%
75%
Institutions Board
Events Individuals
Other
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2023 CHARITABLE EXPENDITURE
TOTAL: 1,876K
11%
21%
26%
36%
2%
4%
Egypt Palestine
Lebanon SE Management Suport
Jordan Impact Fund Pre-Start Up
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BOARD & TEAM

Trustees

Lubna S. Olayan Hussain Al Nowais Samir Assaf Charlotte Boyle Amjad Bseisu Chair of Executive Committee Chairman, Senior Advisor, Chair of UK, CEO, and Deputy Chairperson, AlNowais Investments General Atlantic & HSBC UNHCR Enquest PLC Olayan Financing Company

Sherif Foda Maysa Jalbout Julia Middleton Cynthia J. Oakes Chairman and CEO, Nonresident Fellow in the Founder, Former Salomon Brothers, National Energy Services Center for Universal Common Purpose Morgan Guaranty Ltd, and Reunited Education, Brookings Morgan Stanley

Alfanar Venture Philanthropy

Myrna Atalla Nicolas Kröger Executive Director Operations Director

Fadel Zayan Shenouda Bissada Maya Rahal Investment Director Egypt Country Director Lebanon Country Director

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Sara Lobo
Communications Manager
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Haifa Najjar Reya Kanaan
Business Development Lebanon Portfolio Manager
Manager
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Sabine Nachef Mohammed Alradi Lebanon Programme Manager Senior Investment Officer

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Myriam Hoballah
Social Business Advisor
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Heba Shunbo Bassema Yousef Development & Fundraising Strategic Advisor Advisor

Suha Abdul Rahim Taskina Hadi Brian Dexter Noor Althafeer Ahmed El Nabarawi Jordan Country Director Head of Finance Finance Manager Social Investment Manager Egypt Finance & Investment Manager

Simon Jarjoura Selena Chávez Lebanon Finance Officer Communications Coordinator

Nour Saade Lebanon Impact Officer

Omar Eldahan Abrar Mohamed Ali Development Officer Operations Officer

Impact Investment Team

Youmna Assaf Michelle Mouracade Head of Investments Head of Impact, Investor Relations & Operations

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STRUCTURE, GOVERNANCE & MANAGEMENT

Alfanar is a registered charity (No. 1105048) and a company limited by guarantee (No. 5141908) with no share capital. The Memorandum and Articles of Association provide that the liability of each member is limited to £1 in the event of the Charity being wound up.

In line with the strategy refresh process, Alfanar reviewed and revised its charitable objects to enable the organisation to pursue all its impact goals and strategies, including those related to programme-related investment and impact investment. Alfanar’s Memorandum and Articles of Association were most recently updated on 26 April 2023, reflecting the changes in the charity’s objects.

To further the objects of the Charity, the Trustees established a trading subsidiary ‘Beacon Social Capital’, which was incorporated on 27 December 2018 (No. 11741458). This company has yet to commence direct trading, but it did establish a subsidiary entity in Lebanon, which is a majority shareholder in – Alfanar Social Capital SAL (No. 1028982) – in November 2022. Alfanar’s head office in London employed seven staff members as of December 2023, with three employees based in Egypt, seven employees in Lebanon and two employees based in Jordan.

Alfanar operates a branch in Egypt registered with the Ministry of Social Solidarity and International Cooperation (No. 67/2021, MOSS reference: 21991433314205) renewed in December 2021 for three years and which will require renewal in 2024. Alfanar in Egypt is led by a Country Director with the support of a Finance Manager. Our Development Officer is also based in Cairo.

Alfanar Lebanon is led by a Country Director and supported by two Portfolio Managers. In 2022, they were joined by a Project Manager, a Portfolio Manager, an M&E Officer and a Finance Officer working on the “Youth Employment in Lebanon through Social Enterprise (YELA) Programme” funded by GIZ and BMZ.

Alfanar in Libya (No. 1651) is an affiliate of the UK registered Charity. Due to security issues, Alfanar’s activity in Libya is suspended.

On 12 September 2023, Alfanar established a branch in Jordan, registered with the Ministry of Social Development (No. 2023072002). Alfanar in Jordan is led by the Country Director with the support of a Social Investment Manager.

Alfanar, Inc., US is an independent affiliate 501(c)(3) not-for-profit entity (EIN-75-31970321) that actively supports Alfanar’s mission through fundraising outreach to increase public support and grants. Its transactions are not included in these financial statements. It reports independently to the US Internal Revenue Service and the states of Massachusetts and New York. Alfanar seconds around 10% of the time of its Executive Director, Finance Manager and Communications Coordinator to support Alfanar, Inc., US with outreach and engagement, Board reporting and annual filings.

On 8 November 2022, Alfanar established a foundation, Stichting Alfanar, registered with the Netherlands Chamber of Commerce (No. 88110834). There is an affiliate agreement between the two entities and Stichting Alfanar will actively support Alfanar’s mission through fundraising outreach to increase public support in the European Union and grants.

Alfanar Lebanon (No. 907) is operating as a registered association in Lebanon since 2014. It opened its bank account at BEMO Bank in June 2021. Following Alfanar’s review of its objects, Alfanar in Lebanon will also review its Articles of Association to match those reviewed objects and both entities will sign a revised affiliate agreement in 2024.

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Objects of the Charity

Alfanar’s Memorandum of Association states that the public benefit objects for which it is established are:

Our support packages – SEED, SUSTAIN, SCALE – aim to grow the impact and financial sustainability of the social enterprises we back. Alfanar UK, with the support of Alfanar, Inc., US, and Stichting Alfanar raises and disburses funds to support our venture philanthropy work across Egypt, Lebanon, Jordan, Palestine and elsewhere in the Arab region.

All policies are approved by the Trustees to comply with UK legal requirements and good business practice. The Board of Trustees is authorised to appoint new Trustees or to fill vacancies arising through term completion, resignation or death. The Trustees are members and directors for Companies Act purposes. They serve three-year terms and may be reelected five times, or exceptionally, six times. Cynthia J. Oakes serves as Director of Alfanar Inc. US and Julia Middleton serves as a Director of Stichting Alfnar. Alfanar, the Charity, was elected President of Alfanar in Lebanon in 2023 and is represented by Executive Director Myrna Atalla.

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Trustee Induction and Training

Shortly after the appointment, new Trustees review their job description, and sub-committee Terms of Reference, and have an induction meeting with the Executive Director and the Senior Management Team to review and better understand Alfanar’s business plan and targets, the way it selects and manages social enterprises to maximise impact and financial sustainability, the fundraising strategy and how to support in the achievement of income targets, financial reporting and other operations.

Investment Committee Finance Committee

The Finance Committee scrutinizes Alfanar's business plans, budgets and management accounts and ensures proper financial procedures and controls are in place and operating. The committee also reviews broader operational matters, internal policy developments and the relationship between Alfanar subsidiaries and affiliates. It also oversees the audit process and reviews and endorses the statutory accounts ahead of Board review and approval.

Nominations Committee

Board Meeting

The Board meets quarterly and has conducted virtual meetings since 2020. There are four subcommittees reporting to the Board each with specific terms of reference and functions delegated by the Board, which also meet four times a year. The Board endeavours to hold at least one Board meeting in one of the countries of operation every other year to ensure that Trustees witness Alfanar’s venture philanthropy process and meet social enterprises first-hand. Alfanar endeavors to organise routine trips for board members to meet with social enterprises in-country.

Investment Committee

The Nominations Committee helps the Board identify the appropriate mix of skills and capabilities it requires for effective leadership and oversight. Its primary function is to assess and cultivate prospective board members and to review the governance structure.

Impact Fund Task Force

The Impact Fund Taskforce helps oversee progress on Alfanar’s efforts to extend the financing lifecycle for social enterprises and social purpose companies, explore impact investments and support the establishment of an independent, but affiliated impact investment fund. It reports on progress at Board meetings.

The Investment Committee reviews requests for long-term venture philanthropy grants and management support for SUSTAIN social enterprises presented by the Investment Director and Country Directors. The social business plans of suitable social enterprises are scrutinized and endorsed by the committee before review for approval by the Board.

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Membership of Trustee & Committees of the Board

Lubna S. Olayan (Chair - Trustee) Amjad Bseisu Charlotte Boyle Cynthia J. Oakes Hussain Alnowais Julia Middleton Maysa Jalbout Samir Assaf Sherif Foda

Investment Committee

Maysa Jalbout (Chair) Alfred Kettaneh Cynthia Oakes Dr.Barbara Ibrahim Nafez Dakkak Ryan Sturgill

Finance Committee

Charlotte Boyle (Chair) Laura Stojcevic Robert Cartwright Samir Assaf Siham Bortcosh

Nominations Committee

Lubna S Olayan (Chair) Amjad Bseisu Charlotte Boyle Samir Assaf

Impact Fund Task Force

Lubna S. Olayan (Chair - Trustee) Julia Middleton Samir Assaf Matthew Courey Walid Haram

Key Management Personnel

Alfanar’s Board delegates authority for the operational delivery of the strategy to the Executive Director and the senior management team. The Charity’s senior management team regularly updates the Board on venture philanthropy industry developments, Alfanar’s progress against the business plan impact and sustainability targets, and how the Charity is managing emerging risks. This ensures that Alfanar’s venture philanthropy approach remains in line with best practices.

The Board of Trustees, the senior management team (Executive Director Myrna Atalla; Operations Director Nicolas Kroger; and Investment Director Fadel Zayan) and the global leadership team (Senior Management Team and Country Directors, Shenouda Bissada (Egypt), Maya Rahal (Lebanon) and Suha Abdul Rahim (Jordan) are the key management personnel of the Charity in charge of directing and controlling, running and operating the Charity on a day-to-day basis.

All Trustees give of their time freely and no Trustee received remuneration in the year. Alfanar appointed a new Country Director in Lebanon to join the global leadership team in June 2023. Alfanar aims to recruit a Director of Philanthropy and Partnerships in 2024 to join the senior management team.

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Staff Pay

The pay of Alfanar’s staff is set in line with its salary policy and is reviewed periodically concerning the achievement of performance targets and cost of living changes. The Trustees last approved cost of living adjustments in 2022. Given the nature of the charity, the directors endeavour to benchmark against pay levels in other charities of a similar size. The remuneration benchmark is the midpoint of the range paid for similar roles. In 2023, the organisations started developing a global competency framework, which will also incorporate a revision of Alfanar’s salary scale and approach in 2024.

Human Resources

In 2022, the Charity approved a revised delegation of authority, to ensure that roles are properly authorised according to level of responsibility and to maintain effective decisionmaking and segregation of responsibilities. In line with the approved business plan, the Charity developed a revised organigram forecasting human resource requirements over the coming years.

Fundraising Statement

We are grateful to the individual, corporate and institutional donors who either pledged or renewed their support to Alfanar in 2023 and longer term, and we thank all those who have contributed to Alfanar’s mission with a donation of money, time, connection or expertise over the past year.

Alfanar received support from 69 donors in total (2022: 143 donors). 48 individual donors provided 19.6% of income (£481k), with 21 institutional donors (including trusts and foundations, corporate donors and international aid and bank interest) providing 80.4% of income (£1,971k).

38.4% of income (£942k) raised in 2023 was unrestricted (compared to 62% in 2022), this reduction is due to not hosting a Gala dinner in 2023.

Safeguarding

Alfanar endeavours to protect from harm those who work for and with us, as well as those our social enterprises serve.

As part of our due diligence process with prospective social enterprises, we check for the existence and active use of safeguarding policies and practices. Alfanar has rolled out a new ASSET training module on safeguarding with its social enterprises to ensure that all are effectively trained and supported to implement the systems required to reliably provide safe and effective care to those they serve. Since 2021, when the Board approved revised safeguarding policies as part of our internal staff handbook, all staff received training on these new policies. New joiners receive training on the staff handbook, including safeguarding, as part of induction. In addition, refresher trainings are organised on an annual basis.

Trustee Cynthia J. Oakes was appointed Board Safeguarding Representative in 2021.

Risk Management

Alfanar’s Board of Trustees has overall responsibility for ensuring Alfanar has an appropriate system of controls, financial and otherwise. It is responsible for keeping proper accounting records, which explain the transactions, disclose the financial position and comply with the Companies Act 2006 and UK GAAP.

It is also responsible for safeguarding the assets of the Charity and for taking reasonable steps to detect and prevent fraud and other irregularities. It also has responsibility for identifying and managing the risks faced by the organisations.

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Alfanar has a risk register that identifies the major risks to the Charity. This register is regularly updated, and processes are put in place to mitigate risks. It is reviewed by the Trustees bi-annually.

The following were identified as the principal risks facing the Charity in 2023/2024:

Key Risk Mitigations Mitigations
Limited fundraising capabilities and over-reliance
on small number of donors to cover core costs		 Ambitious recruitment plan to lead the new strategy and bolster the
fundraising and communications resourcing.
20th Anniversary dinner to be held in July 2024
Continue work on cultivating and stewarding multi-year, long-term
engagement from supporters.
Shortfall in operational capacities to effectively
support country teams		 Continue improvements to our work-management systems and
operations tools. This includes grant management and HR platforms.
Ensure backup operational arrangements, including banking
arrangements, are in place
Ability to work in our countries of operations is
compromised because of increased instability in the
region		 Regularly monitor developments and ensure security protocols are
in place where required
Continue working through duly vetted organisations only and in line
with charity commission guidelines
Failure to launch impact fund Finalise recruitment of key persons
Ensure that the Fund is attractive to investors and structured to
succeed in meeting its fundraising targets

Reserves Policy

The Board policy is to hold free reserves which represent the next six months’ projected expenditure budget after deducting expenditure funded by currently held restricted reserves, confidently expected and guaranteed income. On 31 December 2023, Alfanar’s free reserves target range, based on an ambitious budget was £640k to £690k.

On 31 December 2023, reserves held totalled £1,435k (2022: £1,455k), of which £923k represented restricted funds (2022: £766k) and £512k represented unrestricted funds (2022: 689k). Designated funds on 31 December 2023 were £4k (2022: £30k), leaving general reserves at £508k (2022: £659K). Included within this is the value of a programme-related equity investment of £80k, which the trustees regard as not being free reserves, leaving free reserves at £428k. This is below the reserves target range. The Board are confident that the anniversary Gala dinner planned for July 2024 will significantly improve the position but continue to closely monitor expenditure during the early part of 2024 to ensure free reserves remain on target.

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Statement of Trustee’s Response

The Trustees who are also directors of Alfanar for the purpose of company law are responsible for preparing the Annual Report and the financial statements under applicable law and standard United Kingdom accounting practice (UK GAAP).

Company law requires trustees to prepare financial statements that give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of those resources, including income and expenditure, of the charitable company for that period. In preparing these financial statements, the Board of Trustees are required to:

Make judgements and estimates that are reasonable and prudent.

The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with company law. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each of the Trustees has confirmed that, so far as they are aware, there is no relevant audit information of which the Charity’s auditor is unaware, and that they have taken all the steps that they individually ought to have taken as a Trustee to make themselves aware of any relevant audit information, and to establish that the Charity’s auditor is aware of that information.

This report was approved by the Trustees on __ of 18__ 2024 and is signed on their behalf. June

TRUSTEE_______ Julia Middleton

Alfanar 2023 Annual Report | 46

INDEPENDENT AUDITORS REPORT

Opinion

We have audited the financial statements of Alfanar (the ‘parent charitable company’) and its subsidiary (the ‘group’) for the year ended 31 December 2023 which comprise the consolidated statement of financial activities, the group and parent charitable company balance sheets, the consolidated statement of cash flows and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the group financial statements section of our report. We are independent of the group and parent charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on Alfanar's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Alfanar 2023 Annual Report | 47

Other Information

The other information comprises the information included in the trustees’ annual report, other than the group financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the group financial statements does not cover the other information, and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the group financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the group financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ annual report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and Charities Act 2011 requires us to report to you if, in our opinion:

Alfanar 2023 Annual Report | 48

Responsibilities of trustees

As explained more fully in the statement of trustees’ responsibilities set out in the trustees’ annual report, the trustees (who are also the directors of the parent charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group’s and the parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statement

We have been appointed auditor under the Companies Act 2006 and section 151 of the Charites Act 2011 and report in accordance with those Acts.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud are set out below.

Capability of the audit in detecting irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

We inspected the minutes of meetings of those charged with governance.

Alfanar 2023 Annual Report | 49

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company's members as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and section 144 of the Charities Act 2011 and regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jonathan Orchard (Senior statutory auditor)

17 August 2024

for and on behalf of Sayer Vincent LLP, Statutory Auditor 110 Golden Lane, LONDON, EC1Y 0TG

Sayer Vincent LLP is eligible to act as auditor in terms of section 1212 of the Companies Act 2006

ALFANAR (Company limited by guarantee no. 05141908)

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (incorporating an Income and Expenditure Account) FOR THE YEAR ENDED 31 DECEMBER 2023

Note
INCOME
Donations
2
Other trading activities
3
Income from charitable activities
4
TOTAL INCOME
EXPENDITURE
Expenditure on raising funds
Expenditure on charitable activities
TOTAL EXPENDITURE
5
Net income
NET MOVEMENT IN FUNDS
TOTAL FUNDS BROUGHT FORWARD
TOTAL FUNDS CARRIED FORWARD
Note
INCOME
Donations
2
Other trading activities
3
Income from charitable activities
4
TOTAL INCOME
EXPENDITURE
Expenditure on raising funds
Expenditure on charitable activities
TOTAL EXPENDITURE
5
Net income
NET MOVEMENT IN FUNDS
TOTAL FUNDS BROUGHT FORWARD
TOTAL FUNDS CARRIED FORWARD
Current Year
Prior Year		 Unrestricted
Funds
2023
£
472,256
113,391
355,958		 Restricted
Funds
2023
£
8,630
-
1,502,426
1,511,056
-
1,354,141
1,354,141
156,915
156,915
766,394
923,309
Restricted
Funds
2022
£
151,293
-
812,567
963,860
-
954,513
954,513
9,347
9,347
757,047
766,394		 Total
Funds
2023
£
480,886
113,391
1,858,384
2,452,661
326,971
2,145,872
2,472,843
(20,181)
(20,181)
1,455,190
1,435,009
Total
Funds
2022
£
1,520,827
12,815
970,211
2,503,853
518,905
1,533,980
-
2,052,885
450,968
450,968
1,004,222
1,455,190		 Total
Funds
2022
£
1,520,827
12,815
970,211
941,605 2,503,853
326,971
791,731		 518,905
1,533,980
1,118,702 2,052,885
(177,096) 450,968
(177,096)
688,796		 450,968
1,004,222
511,700 1,455,190
Unrestricted
Funds
2022
£
1,369,534
12,815
157,644		 Total
Funds
2021
£
646,142
4,183
1,476,445
1,539,993 2,126,770
518,905
579,467		 278,891
1,682,230
-
1,098,372 1,961,121
441,621 165,649
441,621
247,175		 165,649
838,573
688,796 1,004,222

The annexed notes form part of these financial statements

ALFANAR (Company limited by guarantee no. 05141908)

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2023

Note
FIXED ASSETS
Tangible assets
10
Investment Assets
11 i
Programme-related equity investments
11 ii
CURRENT ASSETS
Programme-related investments
13
Debtors
14
Cash at bank and in hand
Creditors: amounts falling due
within one year
15
NET CURRENT ASSETS
NET ASSETS
Restricted funds
17
Unrestricted funds
Designated funds
18
General fund		 £
82,953
116,171
1,309,477
£
4,432
1
80,260
84,693
1,350,316
1,435,009
923,309
511,700
1,435,009
2023		 £
15,697
551,952
992,876		 £
3,350
1
80,260
2022
83,611
1,371,579
1,508,601
(158,284)		 1,560,525
(188,946)
4,432
507,268		 30,249
658,547
1,455,190
766,394
688,796
1,455,190

These financial statements are prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies.

The financial statements were approved, and authorised for issue, by the Trustees on 18 June 2024 and signed on their behalf by:

Trustee Julia Middleton

The annexed notes form part of these financial statements

ALFANAR (Company limited by guarantee no. 05141908)

CHARITY BALANCE SHEET AS AT 31 DECEMBER 2023

Note
FIXED ASSETS
Tangible assets
10
Investment Assets
11 i
Program-related equity investments
11 ii
CURRENT ASSETS
Programme-related investments
13
Debtors
14
Cash at bank and in hand
Creditors: amounts falling due
within one year
15
NET CURRENT ASSETS
NET ASSETS
Restricted funds
17
Unrestricted funds
Designated funds
18
General fund		 £
82,191
67,980
1,183,506
£
4,432
1
80,260
84,693
1,175,751
1,260,444
730,118
530,326
1,260,444
2023		 £
15,697
551,952
992,876		 £
3,350
1
80,260
2022
83,611
1,371,579
1,333,677
(157,926)		 1,560,525
(188,946)
31,331
516,836		 30,249
658,547
1,455,190
766,394
688,796
1,455,190

These financial statements are prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies.

The financial statements were approved, and authorised for issue, by the Trustees on 18 June 2024 and signed on their behalf by:

Trustee Julia Middleton

The annexed notes form part of these financial statements

ALFANAR (Company limited by guarantee no. 05141908)

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

Notes
Cash provided by operating activities
Net movement in funds
Add back depreciation charge
(Increase) / Decrease in programme related investments
(Increase) / Decrease in debtors
(Decrease) / Increase in creditors
Net cash generated/ (used in)
operating activities
Cash flows from investing activities
Purchase of tangible fixed assets
Net cash generated from/(used in)
investing activities
Cash and cash equivalents at the
beginning of the year
Cash in hand
Total cash and cash equivalents at
the end of the year
15
Increase in cash and cash
equivalents in the year		 £
£
(20,181)
1,477
(67,256)
435,780
(30,662)
319,159
(2,558)
(2,558)
316,601
992,876
992,876
1,309,477
2023		 £
£
450,968
1,117
28,913
(186,164)
45,474
340,308
(1,836)
(1,836)
338,472
654,404
654,404
992,876
2022		 £
£
450,968
1,117
28,913
(186,164)
45,474
340,308
(1,836)
(1,836)
338,472
654,404
654,404
992,876
2022
(2,558) (1,836)
992,876 654,404
338,472
654,404
992,876

The annexed notes form part of these financial statements

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

1. Accounting policies

Basis of preparation and Group Accounting

These financial statements have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102). The Charity is a public benefit entity for the purposes of FRS 102 and therefore has also prepared the financial statements in accordance with the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (The FRS 102 Charities SORP) and the Charities Act 2011.

Assets and liabilities are initially recognised at historic cost or transaction value unless otherwise stated in the accounting policy or note.

These financial statements consolidate the results of the charity and its controlled subsidiaries, Stichting Alfanar (Netherlands) and Beacon Social Capital on a line by line basis. Transactions and balances between the charity and its subsidiaries have been eliminated from the consolidated financial statements. Balances between the entities are disclosed in the notes to the charity's balance sheet. A separate statement of financial activities, or income and expenditure account, for the charity itself is not presented as a summary of the result for the year is disclosed in the notes to the accounts.

The SORP 2015 stipulates that where overseas offices are legally registered in their country of operations as separate legal entities, this is an indication that they should be treated as subsidiaries for accounting purposes. However, having reviewed the governance and management procedures in place, oversight from ALFANAR in the UK is such that the office in Lebanon is in substance a branch and so are included in the results and position of the charity.

Going Concern

The Trustees have assessed whether the use of the going concern basis is appropriate and have considered possible events or conditions that might cast significant doubt on the ability of the Charity to continue as a going concern. In particular, The charity's gala dinner, took place in December 2022 and was highly successful, and a 20th anniversary Gala Dinner is planned for the summer of 2024. The charity experienced a decline in support for on-line activities and campaigns, but this was not unexpected. Alfanar's Senior Management team evaluated progress achieved to date and used it to inform a revised 2022-2026 strategy aimed at accelerating the impact of Alfanar's support to social enterprises, driving regional growth, and positioning Alfanar as a noteworthy social enterprise expert and resource for the MENA region. The charity replenished free reserves to target levels by Q2 2023. Accordingly, the Trustees continue to adopt a going concern basis in preparing the financial statements.

Presentational currency

The presentational currency used is British pound sterling, and balances are rounded to the nearest £1.

Company status

Alfanar is a company limited by guarantee. In the event of the Charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the Charity.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the Charity’s accounting policies, Trustees are required to make judgements, estimates, and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects the current and future periods.

In the view of the Trustees, there are no key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objects of the Charity and which have not been designated for other purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions agreed with donors which have been raised by the Charity for particular purposes.

Designated funds are unrestricted funds earmarked by the Trustees for particular purposes.

Income

All income is included in the Statement of Financial Activities when the Charity is legally entitled to the income, receipt is probable, and the amount can be quantified with reasonable accuracy. Voluntary income is received by way of donations and gifts and is included in full in the Statement of Financial Activities when receivable. Gift aid recoverable is recognised at the date the related donation is received. Donated services are included in income and expenditure at the value of the gift to the Charity.

Expenditure

All expenditure is accounted for on an accruals basis. Irrecoverable VAT is charged in line with the expense to which it relates. Expenditure is allocated to a particular activity where the cost relates directly to that activity. Support, overall direction and administration of each activity, comprising the salary and overhead costs of the central function, is apportioned on the basis of the staff costs directly attributed to each activity.

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

Grant investments

The first payment on grant investments is reflected in the accounts at the point at which they are approved by the Board and communicated to the investee. Subsequent tranches are dependent on performance assessments by Alfanar and are reflected at the time of approval by a member of the senior management team.

Some grant agreements are negotiated with a clause stating that a proportion will be repaid if a target level of income is generated by the project. As it is uncertain that these repayments will be made, such zero interest repayable grants are accounted for in the first instance in the same way as other grant investments. If these grants are repaid the sums are treated as income and transferred to general funds. In the instance when there is a strong likelihood of repayment, the grant is treated as a programme-related investment and held on the balance sheet in the fund used to disburse the payment to the investee.

Foreign currencies

Transactions in foreign currencies during the year are recorded at the average rate ruling at the time of the transaction. Monetary assets and liabilities at the year end denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All differences are taken to the Statement of Financial Activities. The accounts also include unrealised losses in exchange rate movements in currencies held at the year end.

Tangible fixed assets and depreciation

All assets costing more than £1,000 are capitalised. Assets under this value are capitalised when appropriate.

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of fixed assets over their estimated useful lives as follows:

Office equipment - 25% of net book value

Programme-related investments

Programme-related investments that are in the form of concessionary loans and zero interest repayable grants are accounted for at the outstanding amount of the investment less any provision for unrecoverable amounts. Any impairment is charged to the Statement of Financial Activities classified as expenditure on charitable activities

Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments. Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. With the exception of prepayments all other debtor and creditor balances are considered to be basic financial instruments under FRS 102.

DONATIONS
Current Year
Alfanar Boards
Other Individuals
Dinner Events
Donated Services
Prior Year
Alfanar Boards
Other Individuals
Legacies
Dinner Events
Donated Services		 Unrestricted
Funds
2023
£
165,391
94,981
126,546
85,338		 Charity
Restricted
Total
Unrestricted
Restricted
Total
Funds
Funds
Funds
Funds
Funds
2023
2023
2023
2023
2023
£
£
£
£
-
165,391
165,391
-
165,391
8,630
103,611
94,981
8,630
103,611
-
126,546
126,546
-
126,546
-
85,338
85,338
85,338
Group
472,256 8,630
480,886
472,256
8,630
480,886
1,369,534

2. DONATIONS

In 2023, £8,854 (2022: £21,510) of Gift Aid was receivable. This has been accounted along with the donations that attracted the claim. £7,500 (2022: £11,500) was included within Board income and £1,354 (2021: £10,010) was included within Other Individuals.

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

3. OTHER TRADING ACTIVITIES

Current Year
Social Enterprise Management Support
Bank Interest
Prior Year
Social Enterprise Management Support
Bank Interest		 Unrestricted
Funds
2023
£
107,865
5,526		 Restricted
Total
Total
Funds
Funds
Funds
2023
2023
2022
£
£
£
-
107,865
12,663 Consultancy
-
5,526
152
Bank Interest
-
113,391
12,815
Restricted
Total
Total
Funds
Funds
Funds
2022
2022
2021
£
£
£
-
12,663
4,183
-
152
-
-
12,815
4,183
113,391
Unrestricted
Funds
2022
£
12,663
152
12,815

Social enterprise management support in 2023 includes funds from SANAD (£38,505) and Drosos (£69,028) ,for the delivery of support services to social enterprises.

4. INCOME FROM CHARITABLE ACTIVITIES Current Year

Current Year
Alfanar, Inc., US
The Asfari Foundation
Drosos Foundation
Ford Foundation
L'Oreal
Global Fund for Widows
Osman Consulting
SODIC
USAID Lebanon
WasteAid
Other Organisations
UK Government Employment Allowance
ERC
Deutsche Gesellschaft für Internationale
Zusammenarbeit (GIZ) GmbH
Impact Europe (previously EVPA)		 Unrestricted
Funds
2023
£
130,805
-
-
173,442
-
-
-
-
-
-
20,446
-
-
26,265
5,000		 Restricted
Total
Unrestricted
Restricted
Total
Funds
Funds
Funds
Funds
Funds
2023
2023
2023
2023
2023
£
£
£
£
£
23,504
154,309
130,805
23,504
154,309
60,000
60,000
-
60,000
60,000
73,056
73,056
-
73,056
73,056
-
173,442
173,442
-
173,442
169,362
169,362
-
28,702
28,702
169,170
169,170
-
169,170
169,170
86,237
86,237
-
-
-
52,931
52,931
-
52,931
52,931
639,158
639,158
-
639,158
639,158
62,337
62,337
-
62,337
62,337
81,943
102,389
20,446
81,943
102,389
72,411
72,411
-
72,411
72,411
12,317
12,317
-
12,317
12,317
-
26,265
26,265
-
26,265
-
5,000
5,000
-
5,000
GROUP
CHARITY
355,958 1,502,426
1,858,384
355,958
1,275,529
1,631,487

Prior Year

Alfanar, Inc., US
Other Corporate
Drosos Foundation
Global Fund for Widows
LIFE Generation Fund
Oxfam
SODIC
WasteAid
Other Trusts and Foundations
UK Government Employment Allowance
Deutsche Gesellschaft für Internationale
Zusammenarbeit (GIZ) GmbH		 Unrestricted
Funds
2022
£
56,273
-
67,630
-
-
-
201
15,490
-
13,050
5,000		 Restricted
Total
Funds
Funds
2022
2022
£
£
-
56,273
100,000
100,000
73,425
141,055
20,660
20,660
450,092
450,092
40,979
40,979
-
201
66,426
81,916
53,485
53,485
7,500
20,550
-
5,000
157,644 812,567
970,211

Income under Other Trusts and Foundations was received from 2 (2022: 3) organisations who wish to be anonymous in published financial statements.

.

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

5. EXPENDITURE

Current Year
Direct staff
costs
Other direct
costs
£
£
Costs of raising funds
151,124
90,942
Charitable activities
480,421
1,395,539
631,545
1,486,481
Support costs are detailed in Note 7 and are allocated on the basis
Prior Year
Direct staff
costs
Other direct
costs
£
£
Costs of raising funds
142,940
231,493
Charitable activities
331,563
1,007,077
474,503
1,238,570		 Direct staff
costs
£
151,124
480,421		 Other direct
costs
£
90,942
1,395,539		 Support
costs
Total 2023
£
£
84,905
326,971
269,912
2,145,872
631,545 1,486,481 354,817
2,472,843
of direct staff costs.
Support
costs
Total 2022
£
£
144,472
518,905
195,340
1,533,980
474,503 1,238,570 339,812
2,052,885

Support costs are detailed in Note 7 and are allocated on the basis of direct staff costs.

6. NET MOVEMENT IN FUNDS

Auditors' remuneration for audit (excluding VAT)
Auditors' remuneration for other services
Audit remuneration for previous year
Depreciation
Operating lease rentals: property
This is stated after charging:		 2023
£
12,240
2,448
22,181
1,477
29,574		 2022
£
20,350
1,653
-
1,117
14,806

7. SUPPORT COSTS

Governance: audit fee (including irrecoverable VAT)
Staff costs
Staff development
Accounting, payroll and compliance
Rent overseas office space
Rent UK office space
Legal and professional fees
Bank charges
Insurance
Realised loss/(gain) on foreign exchange
exchange loss/(gain) on consolidation
* Unrealised loss on foreign exchange
Depreciation
Other		 2023
£
36,869
211,391
4,355
7,383
7,224
22,351
45,530
4,728
3,650
(61,458)
(1,089)
42,580
1,477
29,827
354,817		 2022
£
19,264
188,606
1,759
4,843
12,515
8,400
18,279
8,060
1,862
(8,215)
-
21,919
1,117
61,403
339,812
354,817

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

8. DIRECT COSTS OF CHARITABLE ACTIVITIES
Grants Awarded
- Egypt Portfolio (SUSTAIN)
Brighter Tomorrow for Child Protection (BTCP)
Future Eve Foundation
Heya Masr
Life Vision for Development
Man Ahyaha Association
Startups Without Borders
Yadawee
Delta Oil
Duma
Emonovo (Marj3)
Nakoll
Sprints
Threads of Hope
- Egypt Portfolio (SEED)
Education
Aata Charitable Association
Future Zone
Maharat Vocational Training
Makouk Walada Advanced Games for Children
Man Ahyaha Association Business Planning
Plastics Recycling Opportunities (PRO)
Upfuse
Waste Management Company
Very Nile
- Emergency Gaza Response
Egyptian Food Bank
- Lebanon Portfolio (SUSTAIN)
Ana Aqra
Bridge.Outsource.Transform. (B.O.T.)
FabricAid
L'Artisan du Liban
Lebanese Alternative Learning (Tabshoura)
Souk El Tayeb
BEDCO by March NGO
SE Factory
ShareQ
ProAbled - by ShareQ
Refugee Portfolio
Inaash
NaTakallam
SE Factory- Refugee programme
WPA/Soufra/Nawras Preschool
- Social Enterprise Support Fund Lebanon programme
YELA Seed Cycle
- Palestine Portfolio (SEED)
Al Reef for Investment and Agriculture
Flowless Smart Water
Sawaed 19
Sindyan Educational Media
Spark for Innovation and Creative Society
Yalla Mishwar
Waselat Al Muffaker
- Palestine Portfolio (SUSTAIN)
Flowless Smart Water
Total Grants Awarded		 2023
£
15,025
115,534
1,667
-
25,455
13,343
3,634
38,291
3,210
3,634
3,604
3,634
3,662
230,693
-
-
-
-
1,561
8,231
8,231
8,231
26,253
65,785
-
97,258
35,683
45,682
59,758
31,917
29,968
54,120
44,064
62,832
14,846
43,118
-
-
519,246
159,914
159,914
-
-
-
-
-
3,997
-
3,997
24,424
1,026,315		 2022
£
19,330
18,953
4,757
12,989
-
-
10,376
10,376
10,827
10,394
10,394
10,394
10,378
129,168
4,236
4,728
4,729
4,729
4,236
-
-
-
22,658
-
66,007
119,274
78,264
37,364
91,375
-
47,130
116,970
24,753
-
20,063
-
16,101
13,520
630,821
-
-
4,052
4,104
4,132
4,071
4,143
-
4,071
24,573
-
807,220

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

8. DIRECT COSTS OF CHARITABLE ACTIVITIES - continued

Total Grants Awarded
ASSET and AIM
1
Miscellaneous social enterprise support costs
2
Impact Fund pre-start up activity costs
3
Accelerate Study Mission		 1,026,315
9,785
149,063
208,970
1,406
1,395,539		 807,220
12,768
76,172
108,640
2,277
1,007,077
1,395,539
£

1 ASSET (Alfanar Sustainable Social Enterprise Training) and AIM (Alfanar Impact Management) are two critical components of the support Alfanar provides to social enterprises beyond its grant funding.

2 Miscellaneous social enterprise support costs includes contracted-out support to social enterprises covering: business planning, business training, marketing and video production costs. It also includes £69,599 of expenditure relating to the impact monitoring tool, Qlik.

3 Impact Fund pre-start-up activity costs are costs incured in the pre-start-up phase associated with impact fund team building, pipeline and investment strategy refinement and legal counsel informing the final structure.

INVESTMENT SPEND

8a Investment spend is the total of direct staff expenditure and other direct costs of charitable activities.

Investment spend
9. STAFF COSTS
Gross salaries
Social security costs
Employer pension contributions
Salaries of overseas staff
Other overseas staff costs
Direct costs of charitable activities
Direct staff costs on charitable activities		 2023
2022
£
£
1,395,539
1,007,077
480,421
331,563
1,875,960
1,338,640
2023
2022
2023
2022
£
£
£
£
389,125
340,794
389,125
340,794
44,494
40,169
44,494
40,169
4,158
4,935
4,158
4,935
399,960
273,610
399,960
273,610
5,198
3,601
5,198
3,601
842,935
663,109
842,935
663,109
Group
Charity		 2023
2022
£
£
1,395,539
1,007,077
480,421
331,563
1,875,960
1,338,640
2023
2022
2023
2022
£
£
£
£
389,125
340,794
389,125
340,794
44,494
40,169
44,494
40,169
4,158
4,935
4,158
4,935
399,960
273,610
399,960
273,610
5,198
3,601
5,198
3,601
842,935
663,109
842,935
663,109
Group
Charity		 2022
£
1,007,077
331,563
1,338,640
842,935
663,109

A total of 22 individual staff members were employed in the year (2022 : 20, 17 prior to Oct 2022).

Number of employees whose salaries were in the following bands: 2023 2022
£90,000-£99,999 1 1
£80,000-£89,999 - -
£70.000-£79,999 2 -
£60,000-£69,999 - 1
Aggregate employer's annual contributions to pension schemes for these staff 2,642 £1,321

348896

The key management personnel of the Charity comprises the Trustees, the Executive Director and the Senior Management Team. The total employee benefits of the key management personnel of the Charity were £401, 525 (2022: £251,800).

The Trustees received no remuneration nor the reimbursement of expenses in either year.

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

TANGIBLE FIXED ASSETS
Cost
At 1 January 2023
Additions in the year
Assets disposed during the year
At 31 December 2023
Depreciation
At 1 January 2023
Charge for the year
Depreciation on assets disposed
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022		 Office
Equipment
£
13,955
2,559
(150)
16,364
10,605
1,477
(150)
11,932
4,432
3,350

10. TANGIBLE FIXED ASSETS

11. INVESTMENTS ASSETS AND SUBSIDIARIES

Alfanar's investment at the balance sheet date in the wholly-owned share capital of the following unlisted companies is as follows:

i) Beacon Social Capital (Dormant)
Current assets
Total net assets
Called up share capital
ii) Programme-related equity investment at the balance sheet date
FabricAid $100,000		 2023
£
1
1
1
1
80,260
80,260		 2022
£
1
1
1
1
80,260
80,260

The equity investment in FabricAid consists of $60,000 convertable grant made in 2021 which was converted to equity in 2022 plus a further equity investment of $40,000 made in 2022. This equates to 10% of FabricAid's share capital.

iii) In February 2023, Stichting Alfanar was formed and registered in the Netherlands as a controlled subsidiary of Alfanar.

A summary of the results of the subsidiary for the period to 31 December 2023 are shown below:

Income from Charitable Activities
Cost of Charitable Activities
Net Incoming Resources
Funds held
Funds brought forward
Incoming resources for the period
Funds carried forward
The agregate of Asets, Liabilities and reserves was
Assets
Liabilities
Funds		 General
Funds
Restricted
Funds
Total
13,973
244,912
258,885
(10,093)
(92,945)
(103,038)
3,880
151,967
155,847
-
-
-
3,880
151,967
155,847
3,880
151,967
155,847
3,880
201,794
155,847
-
49,827
-
3,880
151,967
155,847

12. PARENT CHARITY

The parent charity's gross income and result for the year are disclosed as follows:

Gross Income
Result for the year		 2023
£
2,225,170
(194,746)		 2022
£
2,503,853
450,968

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

13. PROGRAMME-RELATED INVESTMENTS

PROGRAMME-RELATED INVESTMENTS
Repayable Grants due within one year 2023
£
82,953
82,953		 2022
£
15,697
15,697

The programme-related investments are:

  1. A repayable grant included in our 2020 agreement with Future Eve Foundation, repayable over three years in equal instalments. The final payment of £15,697 (EGP 471,300) was made in December 2023.

  2. A further convertible repayable grant to FabricAid Holdings of $100,000 (£82,953) was agreed and paid in 2023. This is due for repayment on or before 31 December 2024.

14. DEBTORS
Due within one year
Grant debtors
Accrued income
Other debtors
Monies owed by Group entities
Beacon Social Capital
Prepayments
15. CREDITORS
Due within one year
Trade creditors
Taxation
Grants payable to investees
Defined contribution pension scheme payments
Other accruals		 2023
2022
2023
2022
£
£
£
£
85,802
166,228
-
166,228
15,495
376,452
15,495
376,452
12,760
131
544
131
-
-
49,827
-
-
581
-
581
2,114
8,560
2,114
8,560
Charity
Group
116,171
551,952
67,980
551,952
2023
2022
2023
2022
£
£
£
£
28,925
23,950
28,925
23,950
-
12,419
-
12,419
92,103
84,045
92,103
84,045
1,783
3,890
1,783
3,890
35,473
64,642
35,115
64,642
Charity
Group
158,284
188,946
157,926
188,946

16. ANALYSIS OF CHANGES IN NET DEBT

At start of year
Cashflows
Acquisition/
disposal of
subsidiaries
New finance
leases
Other non-cash
changes
At end of year
£
£
£
£
£
£		 At start of year
Cashflows
Acquisition/
disposal of
subsidiaries
New finance
leases
Other non-cash
changes
At end of year
£
£
£
£
£
£
Cash
Cash equivalents
Overdraft facility
Loans		 992,876
316,601
-
-
-
1,309,477
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total 992,876
316,601
-
-
-
1,309,477

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

17. Current Year
Egypt
Egypt Fund
Education in Egypt
BTCP
Heya Masr
SODIC: Seed Cycle
Man Ahyaha Association
Future Eve Foundation
Delta Oil
Technical Assistance
Emonovo (Marj3)
Delta Oil
Duma
Nakoll
Sprints
Threads of Hope
Startups Without Borders
Yadawee
Egypt Environment SEED
WasteAid Seed Cycle
Egyptian Food Bank
Lebanon
Lebanon Fund
Education in Lebanon
Women and Youth Employment in Lebanon
BOT
SE Factory
GIZ EPL Project
Impact Europe
Refugees in Lebanon
Natakalam
Emergency Response
Souk El Tayeb
Inaash
Jordan
Impact Europe
Palestine
Palestine SEED cycle
Flowless Smart Water
UK
Accelerate Study Missions
Refugee Portfolio
AMAL Fund
Impact Investment Fund
Ford Foundation
Zakat Fund
Alfanar Development
Egypt- Gaza Crisis Response
Tabshoura/Lebanese Alternative Learning
Emergency Lebanon Campaign
SEMD Programme
Women and Youth Employment in Egypt
ShareQ
TOTAL RESTRICTED FUNDS
RESTRICTED FUNDS		 Brought
Forward
£
13,700
88
1,667
3,792
23,543
85,958
-
28,746
1,817
3,634
3,651
4,087
1,838
4,103
13,343
4,105
46,188
-
4,910
91,791
38,213
62,198
207,051
-
-
31,917
44,064
14,846
-
2,326
-
17,221
-
-
-
-
-
11,597		 Income
Expenditure
Transfers
Carried
Forward
£
£
£
£
3,000
7,700
9,000
4,251
4,339
-
-
1,667
-
35,697
1,561
(3,792)
34,137
22,338
25,455
3,792
24,218
52,931
126,829
12,060
25,508
25,508
-
-
28,746
-
-
1,817
-
-
3,634
-
-
3,651
-
-
4,087
-
-
1,838
-
-
4,103
-
-
13,343
-
-
4,105
-
12,316
58,504
-
62,337
62,337
-
2,497
2,497
4,910
-
59,758
32,033
36,528
59,626
15,115
8,131
54,120
16,209
639,158
507,979
338,230
48,293
17,522
30,771
86,237
43,118
43,119
-
31,917
-
-
44,064
-
-
14,846
-
148,069
28,768
119,301
-
2,326
-
60,000
30,968
11,597
40,629
-
1,474
15,746
13,168
-
13,168
5,493
-
5,493
72,411
72,411
-
169,170
-
169,170
3,522
3,522
-
-
-
(11,597)
-
1,511,056
1,354,141
-
923,309
GROUP
766,394

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

Current Year
Egypt
Egypt Fund
Education in Egypt
BTCP
Heya Masr
SODIC: Seed Cycle
Man Ahyaha Association
Future Eve Foundation
Delta Oil
Technical Assistance
Marj3
Delta Oil
Duma
Nakoll
Sprints
Threads of Hope
Start-ups without borders
Yadawee
Egypt Environment SEED
WasteAid Seed Cycle
Egyptian Food Bank
Lebanon
Lebanon Fund
Education in Lebanon
Women and Youth Employment in Lebanon
B.O.T.
SE Factory
GIZ EPL Project
Impact Europe
Refugees in Lebanon
Natakalam
Emergency Response
Souk El Tayeb
Inaash
Jordan
Impact Europe
Palestine
Palestine SEED cycle
Flowless Smart Water
UK
Accelerate Study Missions
Refugee Portfolio
AMAL Fund
Impact Fund
Ford Foundation
Zakat Fund
Alfanar Development
Women and Youth Employment in Egypt
Tabshoura/ Lebanese Alternative Learning
SEMD Programme
TOTAL RESTRICTED FUNDS
Egypt- Gaza Crisis Response
Emergency Lebanon Campaign
ShareQ		 Brought
Income
Expenditure
Transfers
Carried
Forward
Forward
£
£
£
£
£
13,700
3,000
7,700
-
9,000
88
4,251
4,339
-
-
1,667
-
1,667
-
-
3,792
35,697
1,561
(3,792)
34,137
23,543
22,338
25,455
3,792
24,218
85,958
52,931
126,829
-
12,060
-
25,508
25,508
-
-
28,746
-
28,746
-
-
1,817
-
1,817
-
-
3,634
-
3,634
-
-
3,651
-
3,651
-
-
4,087
-
4,087
-
-
1,838
-
1,838
-
-
4,103
-
4,103
-
-
13,343
-
13,343
-
-
4,105
-
4,105
-
-
46,188
12,316
58,504
-
-
-
62,337
62,337
-
-
4,910
2,497
2,497
-
4,910
91,791
-
59,758
-
32,033
38,213
36,528
59,626
-
15,115
62,198
8,131
54,120
-
16,209
207,051
639,158
507,979
-
338,230
-
28,702
28,702
-
-
-
-
-
-
-
31,917
-
31,917
-
-
44,064
-
44,064
-
-
14,846
-
14,846
-
-
-
27,001
27,001
-
-
2,326
-
2,326
-
-
-
60,000
30,968
11,597
40,629
17,221
-
1,474
-
15,747
-
13,168
-
-
13,168
-
5,493
-
-
5,493
-
72,411
72,411
-
-
-
169,170
-
-
169,170
-
3,522
3,522
-
-
11,597
-
-
(11,597)
-
766,394
1,284,159
1,320,435
-
730,118
CHARITY

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

Prior Year
Egypt
Egypt Fund
Education in Egypt
Educate Me
BTCP
Heya Masr
Seed Cycle
General Education
Future Eve Foundation
Life Vision for Development
Technical Assistance
Marj3
Delta Oil
Duma
Nakoll
Sprints
Threads of Hope
Startups Without borders
Yadawee
Egypt Environment SEED
WasteAid Seed Cycle
Lebanon
Lebanon Fund
Education in Lebanon
Women and Youth Employment in Lebanon
Ana Aqra
B.O.T.
SE Factory
GIZ EPL Project
Environment Lebanon
FabricAid
Refugees in Lebanon
Shatila Studio
WPA Nawras Pre-School
Emergency Response
Jordan
Palestine
Palestine SEED
UK
Accelerate Study Missions
Impact Investment Fund
Alfanar Development
TOTAL RESTRICTED FUNDS
Emergency Lebanon Restricted General
Tabshoura/ Lebanese Alternative Learning
Women and Youth Employment in Egypt
Emergency Lebanon
SEMD Programme		 Brought
Forward
£
3,000
11,936
-
-
-
-
85,958
-
75,266
5,238
5,238
5,238
5,238
5,238
5,238
5,238
5,238
-
1,560
-
66,005
61,816
61,934
21,962
17,538
12,547
161,807
-
50,000
19,498
-
64,316		 Income
Expenditure
Transfers
Carried
Forward
£
£
£
£
13,700
3,000
13,700
-
-
(11,936)
-
16,418
16,330
88
6,424
4,757
1,667
41,352
37,560
3,792
11,607
-
11,936
23,543
23,660
23,660
85,958
3,000
3,000
-
-
46,520
28,746
6,973
10,394
1,817
8,774
10,378
3,634
9,240
10,827
3,651
9,243
10,394
4,087
6,994
10,394
1,838
9,243
10,378
4,103
14,314
6,209
13,343
15,454
16,587
4,105
53,485
7,297
46,188
3,350
-
4,910
124,633
32,842
91,791
-
66,005
-
56,713
80,316
38,213
77,691
77,427
62,198
450,092
243,041
207,051
-
21,962
-
-
17,538
-
-
12,547
-
-
70,980
90,827
-
-
-
-
47,674
2,326
-
2,277
17,221
1,500
1,500
-
-
52,719
11,597
963,860
954,513
-
766,394
CHARITY and GROUP
757,047

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

Transfers. Transfers between funds in the current year have been described within the following notes on each relevant fund.

Egypt fund holds income specifically restricted to social enterprise grants and support activities in Egypt. Allocation to specific projects is at the discretion of the Board. In 2023 funds were used to cover costs of technical assistance provided to the portfolio of Egypt investees.

Educate Me is an educational social enterprisewhich grew witrh Alfanar's support to run model community schools in disadvantaged communities and teacher training programmes across the country. Educate Me graduated from the Alfanar portfolio in 2022

Brighter Tomorrow for Child Protection (BTCP) is an education social enterprise in Alexandria, Egypt that provides affordable treatment and support to children with neurodevelopmental disorders. BTCPgraduated from Alfanar's portfolio at break-even. BTCP received support through Alfanar's online campaigns.

Heyr Masr is a social enterprise that works to build resilience and character development in children preparing them for the toughest of lives. This pilot investment commenced in 2021 is supported by a generour individual.

SODIC seed cycle : This fund from SODIC is supporting the Egypt Education SEED cycle and the first graduate from that programme, Man Ahyaha.

Man Ahyaha is a social enterprise that graduated to Sustain from the first Egypt Education SEED cycle. This fund is supported by SODIC along with unrestricted funds provided by ERC

Future Eve Foundation (FEF) is an active investment and continues to be generously supported by the Global Fund for Widows (GFW). A growing portfolio of housing improvement loans launched by FEF is being supported by SODIC. GFW continues to provide funding and technical assistance to this investment.

Delta Oil is a social enterprise that graduated to Sustain from SEMD programme, see note below. The Sustain Investment is supported by SODIC and ERC.

Life Vision for Development is a social entrerprise that economically empowers smallhold female farmers through Farmer Field Schools and literacy classes. It benefited from funds raised during online campaigns. Life Vision graduated from Alfanar's portfolio in 2022.

Strengthening Social Enterprise for Migration and Development (SEMD) Programme. This is a two year programme 50% funded by GFA with SDC funds. It involves the selection of eight social enterprises for financial and technical support. The first Grant payments were made in 2021 and the second payments were made in 2022. The programme was extended by GFA to April 2023. The final trainings and grant disbursements took place in 2023 and the programme was successfully closed.

WasteAid. Holds funds provided by WasteAid in 2022 and 2023 to enable an environmental focused SEED cycle. This provided tecnnical support and grant awards to three social enteerprises: Upfuse, Waste Management Company, and Bassita.

Gaza crisis response. This fund holds monies for the Egyptian Food Bank to cover the distribution of foodboxes to the people of Gaza on lorries entering the territory through the Rafa Gate. It is powwered with the support of Osman Consulting.

Lebanon Fund. This holds funds from a combination of sources where the doner restricted the gift specifically for work in Lebanon . The balance will be allocated and spent in 2024.

Tabshoura (Lebanese Alternative Learning ) is a social enterprise that has digitised the Lebanese curriculum and is supporting teachers to employ it. It was supported by a corporate donor and online campaigns.

Ana Aqra is an educational social enterprise that works to ensure that all children are able to read and write appropriately. Ana Aqra focuses on early childhood education. Alfanar received funding and support from Their World for Ana Aqra. It graduated from the Alfanar portfolio in 2022.

BOT (Bridge.Outsource.Transform.) is an impact outsourcing platform that enables hundreds of disadvantaged youth across Lebanon and Jordan to access digital freelance work. This investment has been supported by a private individual, online campaigns, The Drosos Foundation and GIZ.

SE Factory is a social enterprisethat provides intensive coding training and then facilitates access to work after graduation for youth across Lebanon. This has been supported by Drosos and GIZ

GIZ EPL Project This holds funds from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, funding our Youtgh Employment in Lebanon programme running for 30 months , 2022-2024. The programme empowers two SEED cycles each year including Technical assistance and business planning along with sustain support to six social enterprises.

Impact Europe . This fund holds advances from Impact Together, formally EVPA , on our joint action in Lebanon and Jordan to strengthen and promote social economy as a vector for job creation and expansion of economic opportunities, leading to a more inclusive economy in the countries. The programme’s focus is to increase access to finance for social enterprises and social businesses, through strengthening existing impact and/or venture philanthropy funds, or development of new financing vehicles, that will become strong ecosystem players, beyond the life of this action. In addition, the action will address several other social economy support organisations (SESOs), that play instrumental roles in the social economy ecosystem, as capacity builders, network builders or advocacy players.

NaTakallam is a social enterprise that facilitates income-generating opportunities for refugees as language-learning partners, translators and interpreters. It has received support from L'Oreal.

Inaash creates dignified employment for nearly 400 female Palestinian refugees through embroidery and high-quality textile production. It has received funding from our Emeregency Lebanon campaign.

WPA Nawras Pre-Schoo l . In 2020, Alfanar concluded its venture philanthropy investment in WPA thanks to the support of generous individuals. Separately, as part of our Emergency Lebanon Appeal, we worked through Soufra to provide hot meals to hundreds of families impacted by the Beirut blast. Funds received late in 2020 were held in 2021 while we discussed with WPA and agreed the best use for the investment. These funds were disbursed in 2022.

Al Ghurair Foundation for Education (AGFE) is focussed on providing support to refugees. It provided funding for MMKN and SE Factory. This two year project commenced in August 2019 and was successfully closed out in 2023.

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

Emergency Response Funds .During 2020, Alfanar ran the Survive and Thrive campaign in response to the COVID-19 pandemic and the Emergency Lebanon Appeal in response to the 4 August 2020 Beirut port explosion. Emergency projects supported by these campaigns included facemask projects, foodboxes and hot meals to vulnerable families. Disbursements in 2022 provided finance and programme support to local social enterprises, March NGO, L'Artisan Du Liban and Inaash.

The total carried forward in this area is £90,827 (2021: £161,817), was disbursed in 2023 to Emergency food programmes along with closing out the agreements with SE's funded in 2021.

Palestine. Holds funds provided by Asfari Foundation to support our SEED cycles in Palestine in 2022 and a Sustain Investment in one graduate from that programme, Flowless Smart Water Solutions, in 2023.

Accelerate Study Missions expose our social entrepreneurs to best-in-class social enterprises in the developing South achieving scale and sustainability in their respective sectors. They were postponed in 2020 due to COVID-19. They are supported by a generous individual. In 2022, this funding enabled Alfanar to take two social enterprises to the Gala Dinner in London.

Impact Investment Fund includes funding dedicated to supporting Alfanar to cover part of the pre-start-up phase costs associated with impact fund team building, pipeline and investment strategy refinement and legal counsel informing the final structure. In 2023, USAID Lebanon provided its support

Ford Foundation: represents the BUILD grant Alfanar successfully secured in 2023. This support will enable Alfanar to develop a social franchise for the Amal project, research social protectionfor social entrepreneurs, and complete an organisational mapping exercise.

Zakat Fund holds Zakat donations received in 2023 that were used to support Zakat compliant programmes within our portfolio.

Alfanar Development Fund . This fund represents support from the Asfai Foundation to strengthen Alfanar's staff and impact model, including the development of learner animations for ASSET. Funds remaining in the restricted fund in 2023 were transferred to support Palestine SUSTAIN social enterprise, Flowless, with the agreement of the donor.

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

18. DESIGNATED FUNDS
Current year
Tangible fixed assets
Palestine Fund
TOTAL DESIGNATED
FUNDS		 Brought
Forward
£
3,350
26,899		 Transfer
Carried
Income
Expenditure
New Assets
Forward
£
£
£
-
(1,327)
2,409
4,432
-
(24,451)
(2,448)
-
-
(25,778)
(39)
4,432
GROUP AND CHARITY		 Transfer
Carried
Income
Expenditure
New Assets
Forward
£
£
£
-
(1,327)
2,409
4,432
-
(24,451)
(2,448)
-
-
(25,778)
(39)
4,432
GROUP AND CHARITY
30,249 - (25,778)
(39)
4,432

The Fixed Asset Fund represents the net book value of tangible fixed assets in use and therefore not available to meet future expenditure. The Palestine designated fund is to support our new operations in that region, matching a fund provided by Asfari.

Prior Year
Tangible fixed assets
Palestine Fund
TOTAL DESIGNATED
FUNDS		 Brought
Forward
£
2,631
-		 Income
£
-
50,000		 Carried
Expenditure
Forward
£
£
(1,117)
1,836
3,350
(23,101)
-
26,899
2,631 50,000 (24,218)
1,836
30,249

19. MOVEMENT OF FUNDS IN THE YEAR

Current year

Current year
Designated funds
General fund
Restricted funds
TOTAL FUNDS
Prior year
Designated funds
General fund
Restricted funds
TOTAL FUNDS		 Brought
Forward
1 January
2023
£
30,249
658,547		 Income
£
-
941,605		 Carried
Expenditure
Transfers
Forward
31 December
2023
£
£
£
(25,778)
39
-
4,432
(1,092,923)
39
507,268
688,796
766,394		 941,605
1,511,056		 (1,118,701)
-
511,700
(1,354,141)
923,309
1,455,190 2,452,661 (2,472,842)
-
1,435,009
Brought
Forward
1 January
2022
£
2,631
244,544		 Income
£
50,000
1,489,993		 Carried
Expenditure
Transfers
Forward
31 December
2022
£
£
£
(24,218)
1,836
30,249
(1,074,154)
(1,836)
658,547
247,175
757,047		 1,539,993
963,860		 (1,098,372)
-
688,796
(954,513)
-
766,394
1,004,222 2,503,853 (2,052,885)
-
1,455,190

ALFANAR (Company limited by guarantee no. 05141908)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

20. ANALYSIS OF NET ASSETS BETWEEN FUNDS

Current year
Tangible fixed assets
Investment Assets
Net current assets
Prior year
Tangible fixed assets
Investment Assets
Net current assets		 Unrestricted
Funds
2023
£
4,432
80,261
427,007		 Restricted
Total
Unrestricted
Restricted
Total
Funds
Funds
Funds
Funds
Funds
2023
2023
2023
2023
2023
£
£
£
£
£
-
4,432
4,432
-
4,432
-
80,261
80,261
-
80,261
923,309
1,350,316
445,633
730,118
1,175,751
Group
Charity
511,700 923,309
1,435,009
530,326
730,118
1,260,444
-
Unrestricted
Funds
2022
£
3,350
80,261
605,185		 -
-
-
Restricted
Total
Funds
Funds
2022
2022
£
£
-
3,350
-
80,261
766,394
1,371,579
766,394
1,455,190
688,796

21. RELATED PARTIES

Alfanar rents and pays for UK office space at less than market rates from 'Common Purpose', where Julia Middleton (Trustee) is the Founder and currently Innovations Officer. The cost in the year was £21,400 (2021: £8,400). In the year, our occupancy grew as Covid restrictions and mitigations were relaxed.

Alfanar board member Cynthia Oakes, is also on the board of Alfanar Inc. In 2023, Alfanar received grants from Alfanar Inc., US amounting to £302,026 (2022: £346,175)

Intragroup Transactions between Alfanar and Stichting Alfanar in 2023 amounted to:

1)Payments from Alfanar to Stichting Alfanar:

Grant towards start up costs £ 5,289 2)Fees payable to Alfanar from Stichting Alfanar Technical assistance and support £49,827 As at 31 December 2023 amounts outstanding from Stichting Alfanar to Alfanar were £49,827 .

During the year, trustees donated £265,500 (2022: £323,228) in total, including board pledges, gifts at events and other campaign donations to Alfanar's general funds. In addition members of the Alfanar, Inc., US board donated £15,224 (2022: £7,608)

22. LEASE COMMITMENT

At the reporting end date the Charity had future minimum lease payments under non-cancellable operating leases on property and office equipment which fall due as follows:

Less than 1 year
Between 2 and 5 years		 2023
£
12,525
-
12,525		 2022
£
7,768
-
7,768

Alfanar 2023 Annual Report | 69

Thanks to Alfanar's generous venture philanthropy support, we have been able to enhance our work and make a lasting impact on the lives of women in need. Mohamed Ezz Business Development Lead, Delta Oil Alfanar Egypt SUSTAIN Portfolio

Alfanar 2023 Annual Report | 70

THANK YOU

We would like to extend our heartfelt thanks to all our donors, advisors and pro-bono supporters for making our work possible.

Alfanar, Inc., US Board

Gretchen Welch (Chair) Carol Prendergast Cynthia J. Oakes Hadia Ghandour Mark Huang

Our Partners

We thank the numerous individual, corporate and institutional donors whose generous contributions in 2022-2023 made Alfanar’s venture philanthropy work possible.

Alfanar Lebanon Board & Advisors

Myrna Atalla (Alfanar Representative, President) Alfred Kettaneh Carine Assouad Caroline Fattal Cesar Kastoun Chadia El Meouchi Hadia Ghandour Nadim Aouad Randa Jamali Sallama Bu Haidar Al Sayegh

Advisors

Amanda Scott

Badri & Salim El Meouchi Baker McKenzie Beirut Digital District Cherine Helmy Differentia Consulting Dr. Barbara Ibrahim Faiz Munshi Grant Thornton Egypt Hala Gorani Hend Sabry Laura Stojcevic Matthew Courey Nafez Dakkak Qlik Robert Cartwright Ryan Sturgill Siham Bortcosh

Institutional & Corporate Partners

Gala Sponsors

Alfanar 2023 Annual Report | 71

ALFANAR

EMPOWERING ENTERPRISE FOR SOCIAL CHANGE

Alfanar UK

Alfanar, Inc., US

38 Artillery Lane, London E1 7LS Company registration number: 5141908 Charity registration number:1105048 Tel: +44 (0) 20 4570 6473 info@alfanar.org

c/o Hurwit & Associates, 1150 Walnut Street (2nd Floor), Newton, Massachusetts 02461 EIN-75-31970321

Stichting Alfanar

Trustees

Saturnusstraat 14, 2516AH The Hague, The Netherlands KVK number: 88110834

Global Leadership Team

Myrna Atalla, Executive Director Fadel Zayan, Investment Director Nicolas Kröger, Operations Director Shenouda Bissada, Egypt Director Maya Rahal, Lebanon Director Suha Abdul Rahim, Jordan / Palestine Director Michelle Mouracade, Impact Fund Advisor Youmna Assaf, Impact Fund Advisor

Lubna S. Olayan (Chair) Hussain Al Nowais Samir Assaf Amjad Bseisu Charlotte Boyle Sherif Foda Maysa Jalbout Julia Middleton Cynthia J. Oakes

www.alfanar.org

linkedin.com/company/alfanarvp

@alfanarvp

@alfanarvp @alfanarvp