Our financial statement for 2022 was audited by WITh Accountants. You can find it here in Dutch).
We had four unexpected windfalls this year. We received support from Stichting Sub3, as well as a large one-time gift from a company, and the police were (again) ordered to pay us a fifteen-thousand-euro penalty. Our umbrella organization, European Digital Rights, twice awarded us a small grant of ca. € 10,000 to support our European activities.
Our desired donor growth of ca. € 30,000 remained entirely unrealized. Although we succeeded in finding many new donors, an above-average number also left us. The increased costs of living and energy, inflation: some donors terminated their standing donation with pain in their hearts or found it necessary to reduce their contribution. Although, thanks to the above-mentioned windfalls, this won't cause problems in the short term, it is a worrying development for the longer term, one which could lead to forced down-sizing.
Income 2022 (in euro)
On the expenditures side, four things stood out. After a number of years with fewer staff than anticipated, and therefore lower costs than budgeted for, we're finally at full force. Furthermore, we've been incrementally increasing our spending in the area of our communications, in order to increase the visibility of our organization and work among the general public. Aside from this, expenditures were overall somewhat lower, and it was luckily not necessary to dip into our long-term illness reserve.
Expenditures 2022 (in euro)
All in all, this means that we close the year with a modest positive result which will be put to use in the coming years. It brings our special-purpose reserve to ca. € 600,000 and our continuity reserve to roughly 30% of our expected costs for the coming year.
In 2022, 7.1% of funds spent went to fundraising and 5.1% to administration. 85.9% was spent directly on achieving our objectives. This is in line with our principle of not spending more than 20% of our funds and our time on fundraising and administration.
For a portion of our work, it's difficult to obtain (sufficient) financial support from individual donors. For this reason, foundations are extremely important to us, both for the sustainability of our work and for the further development and growth of our organization. In some cases, foundations make it possible to take important steps at crucial moments, for instance by funding a new role in the team or research into a new work program.
In 2022, we received support for our core costs from:
- The Adessium Foundation: works toward a society in which people live in harmony with one another and with their surroundings.
- The Ford Foundation: works toward a fair and just society.
- The Limelight Foundation: works toward a robust and free information ecosystem.
- Open Society Foundations (OSF): work toward robust and inclusive democracies.
- Stichting Internet Domeinregistratie Nederland (SIDN): works toward a carefree digital world with opportunities for all.
- Stichting Democratie & Media: invests in independent, critical media and is dedicated to a robust democracy, based on the rule of law.
- Stichting Sub3: strives to provide people and organizations with opportunities for further development through the promotion of equality.
We received project financing from Aspiration Tech for our public-interest tech pilot, from Goeie Grutten for Data. Zo zit dat, from Luminate for Litigating Big Tech (in cooperation with PILP), from Gieskes-Strijbis Fonds for our work for a just society and for our partnership with Amnesty International, the Open State Foundation and Waag, and from Open Society Foundations within the context of the New Executives Fund.
We concluded 2022 with 3,167 steady donors, from whom we receive funds on a monthly, quarterly or yearly basis. We also received donations from individuals 1,190 times via our website or by direct transfer. Donations from individual donors totaled € 368,901.
A strong and stable support base is indispensable to Bits of Freedom. Our donors not only enable us to work independently, but also play an essential role in amplifying our message and strengthening the legitimacy with which we can do our work. In 2022, we strengthened our connection to our support base by, among other things, expanding our quarterly donor update and involving donors more with our work. We also met up with many donors during an exclusive event at IMPAKT in Utrecht.
Something else we focused on in 2022 was tax deductible donating. We simplified the registration process by means of a special page on our website, to which we called attention during our Ready-made Resolutions year-end campaign. With success! Many steady donors re-registered as ANBI (public benefit organization) donors. On the one hand, this is financially beneficial to them and, on the other, it gives us the security of being able to count on their support for at least five years. Curious? You can read all about it on our website.
The following companies supported us in 2022:
With € 10,000 or more: Duckduckgo and Freedom Internet
With € 2,500 or more: BIT, Greenhost, IB-Vision, iunxi - serious ict infrastructure, Mollie, m7, Unc Inc, VoIPGRID and Voys
With € 1,000 or more: Cryptography in Context, Eureka Unlimited, Hunki Enterprises, Intermax Cloudsourcing, VBVB ICT and Yourhosting
With € 500 or more: Breedbandwinkel.nl, Considerati, CT&V advies, Easyswitch.nl, GeoCat, Green Mini host, Het Rooster B.V., iCulture, Mark Verhijde Advies & Projecten B.V., Mijndomein, NederHost, Nijweide BV, PrivacyLab, Prijs Vergelijken, RealConnections, STRM Privacy, Sooda internetbureau B.V., Talksome, VPNGids.nl and Zygomatic
With € 250 or more as ZZP (independent worker without employees) donor: Charys, DevNomads, Digitaal Werktuig, Filosofie in actie, Game Changer Unltd., Leemshop, Lumifin Privacy Professionals, Mindshards
Finally, we received support in kind from: Bitonic, Blendle, Byte, CipherMail, Cyso / SQR.NL, DMARC Analyzer, Ekco, HAGENS, Jeroen Smeets, Mollie, Passbolt, Rick Pastoor, Sentia and Xolphin.
Projected expenditures 2023 (in euros)
Projected income 2023 (in euros)
In our expenditures, we allow for a staffing of 11.5 FTEs. A number of specific projects and events have already been budgeted at ca. € 340,000, with our own share set at € 25,000. Most of the income has already been promised.
We have multi-year arrangements for financial support with six foundations. Adessium Foundation is supporting us through 2025 with € 150,000 per year, Stichting Democratie & Media is supporting us through 2024 with € 35,000 per year and from Open Society Foundations (OSF) we received, in 2021, € 231,000 for the period 2022 through 2024. Limelight Foundation is supporting us through 2024 with € 85,000 per year, Stichting Internet Domeinregistratie Nederland (SIDN) is supporting us up to 2024 with € 30,000 per year and, finally, Sub3 is supporting us for the period from April, 2022 to April, 2024 with an amount totaling € 400,000. We hope to raise an additional € 175,000 in foundation support in 2023.
We hope to raise a total of € 424,000 from donors in 2023, which represents a substantial increase of ca. € 55,000 compared to last year. We hope to raise € 109,000 from companies.
Should we realize the above ambitions, the difference between our estimated income and expenditures will come to - € 204,987. This negative result will be supplemented with funds from the special-purpose reserve. Our continuity reserve will not be used in 2023.
Our financing in the coming years
Desired income mix
Bits of Freedom assigns great importance to having a sustainable financial situation, and it is our intention to remain fully independent. In drawing up our financial planning, we always try to look five years ahead. Our wish is for half of our income to come from individual donors. We would like to receive ca. 35% of our core funding from foundations and hope eventually to be able to receive ca. 15% from companies. At the present time, the share in income from donors (27% in 2023) and from company sponsoring (7% in 2023) is too low as compared to funding from foundations (47% in 2023). Finally, we see that the share in project financing (19% in 2023) is increasing each year. This involves risks in the areas of effectivity, durability. sustainability and good employment practice.
In 2023, we expect to realize our ambitions with regard to donor revenue through an extensive revamp of our own donation software and an enlargement of our shop, as well as through campaigns. Among others, we are currently developing a new donor flow in consultation with donors that will make donating to Bits of Freedom even simpler and more rewarding. Further, there will be a greater focus on micro-donations, and our donor portal will be expanded to include new functionality which simplifies tax deductible donations and gives donors greater control over their donation- and communication preferences. We are proud to be able to develop and offer this through our custom open-source donation software that gives top-priority to privacy.
We will invest in finding funding for our growing European ambitions in the areas of public campaigns and enforcement of the Digital Services Act and Digital Markets Act. In part for this reason, we plan to give greater attention to our English-language communication and international visibility.
In the areas of asset management and financial reserves, we wish to maintain a continuity reserve of at least 25% of our annual costs for the coming year. That's on the low end of average for NGOs of our size. We expect to have a continuity reserve of ca. 30% at the end of 2023.