IIED’s performance in 2022/23 was satisfactory. The institute showed a surplus of GBP£42,000 (compared to a loss of £407,000 in 2021/22) – the first reported for four years – and included £46,000 of planned investment in establishing a new entity, IIED Europe.
Income increased slightly by £0.5m to £21.1m (2022: £20.6m) and, unlike during 2021/22 where there were still significant COVID-19 restrictions in place, there was less requirement to request project extensions resulting in more projects completed within the financial year.
In an increasingly competitive funding environment, IIED is conscious of the need to be as efficient as possible. The institute continued to invest in streamlining our internal processes during 2022/23 to reduce our overheads and reviewing staffing structures to reduce the reliance on higher cost temporary contract staff.
The average number of employees decreased to 140 (2022:146), with eight employees now part of IIED’s dispersed workforce policy, which allows staff the opportunity to work remotely in another country under an employee of record agreement.
IIED reduced its support costs from £3.9 million in 2021/22 to £3.5 million in 2022/23 due to a combination of increased efficiencies and a positive foreign exchange revaluation of £153,000 on year end bank balances.
The organisation reported good visibility of income coverage for 2023/24 from existing projects and a strong pipeline of projects for 2023/24 and beyond. This provides reassurance about the short- to medium-term future.
IIED is funded through income from charitable activities in relation to commissioned research, both practical and academic, and contracted income for 2023/24, at the mid-year point, gives coverage to 95% of the organisation’s budgeted cost base.
IIED has no fundraising activity and is not a grant making organisation; instead it works in collaboration with its partners, resulting in no fundraising activity and grant making disclosures being given.
IIED’s reserves policy is aligned with its five-year strategy launched in April 2019.
To protect the organisation and its charitable programme against the risks of funding loss through income shortfalls and other unexpected financial losses, the policy considers both a risk-based and going concern approach. Based on the aggregate of the two approaches, it has a mid-point of £2.3m: trustees have therefore set the target range of free reserves (being total funds less restricted and designated funds) at between £1.9m and £2.5m.
Total funds on 31 March 2023 were £2.14m (2022: £2.1 million). Designated funds are £0.19m and the total free reserves have increased to £1.95 million (2022: £1.85 million).
This falls within the lower end of the target range endorsed by the board but the budget for 2023/24 aims to replenish reserves by £0.4m to bring the free reserves to £2.35m, which would be at the top end of the policy.
IIED invested its cash in fixed-term deposits during 2022/23. This policy produces an acceptable rate of return while giving flexibility to access funds. IIED is reviewing this policy in 2023/24.
Some IIED trustees are also trustees of other charities, or directors or senior officers in other organisations IIED works with as a normal part of its research activities. Where such work involves payment, they enter into arm’s length contracts and any payments related to these contracts are detailed in the notes to these accounts. The board operates a conflicts of interest policy.
Over half a century IIED has successfully elevated the vision of sustainable development to the heart of international cooperation. But while IIED’s agenda has evolved, the threats of climate change, nature loss and inequality loom larger than ever.
The receptiveness of stakeholders to IIED’s agenda is especially strong, with new audiences emerging as IIED engages in campaigns such as tackling the hidden handbrakes and as investors seek to better understand the impact potential of their money.
However, aid budgets are under considerable threat again, right-leaning governments are now in power in many European countries (Sweden and Italy being notable new entrants), energy and food prices have driven inflation and high interest rates with impacts globally, and the basis for genuine international collaboration to create global public goods is being eroded by war and suspicion.
There are points of light though. The Kunming-Montreal Global Biodiversity Framework offers a more ambitious agenda for protecting and restoring nature, something IIED had been striving for. Similarly, a loss and damage agreement was struck at COP27, which promises added help for those suffering the negative impacts of climate change. Many funders are now recognising the need to get money for climate action to communities who need it most, an agenda being shaped by IIED’s locally led adaptation initiative.
IIED published an external review that highlighted a set of observations, evidence and recommendations to guide the institute in setting a refreshed direction, and IIED’s management accepted these and published its response in August 2022.
Among action already taken was the appointment of a new executive director, Dr. Tom Mitchell, and the creation of a core funding group to retain and increase IIED’s unrestricted funding sources; the approval of a far-reaching strategy and change process to run through 2023; and the devising of a new strategy.
The strategy, to be launched in early 2024, is being designed to be regularly adaptable to needs, opportunities, and threats; as a framework for accelerated learning, both from research and from the impacts of IIED’s advocacy and influence; as an opportunity to agree and communicate IIED’s values and non-negotiables; as a means to prioritise and decide what IIED does less of as well as more; as a platform for upgrading the organisation’s transformation capabilities; and as an invitation and space for radical collaborations and co-creation at each step where intent is forged with others, including existing and new partners.
In this landscape, IIED’s work on responding to the 2022 race audit, developing an inequality and intersectionality approach and on diversity, equity and inclusion will take centre stage. Aspects to be woven into the core of the strategy and implementation approach will ensure that each team and each impact model pursued will champion gender and racial justice, for example.
Financially, FY2023/24 is expected to see significant income growth, but mainly passing through to grantees as IIED’s role as a trusted intermediary gains more traction. IIED will see a modest increase in costs to cope with the cost-of-living crisis and commensurate pay awards to staff, but this will be matched with increased income.
2022/23 financial summary
Government and government agencies
Foreign Commonwealth & Development Office (DFID/FCDO)
Irish Aid, Department of Foreign Affairs (Ireland)
Swedish International Development Cooperation Agency (SIDA)
Department For Environment, Food and Rural Affairs (DEFRA)
Department for Business, Energy & Industrial Strategy (BEIS)
Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU)
Federal Foreign Office Germany
Ministry Of Environment, Sweden
Deutsche Gesellschaft Fur International Zusammenarbeit (GIZ) Gmbh
Netherlands Enterprise Agency
Swiss Agency for Development and Cooperation
Ministry of Economic Growth and Job Creation
The Secretary of State for Health (UK)
Ministry of Foreign Affairs of Finland (Finnish)
Ministry of Infrastructure and Water Management (Netherlands)
Ministry of Foreign Affairs (Netherlands)
Westminster Foundation for Democracy (WF)
International and multilateral agencies
United Nations Food and Agriculture Organisation (FAO)
The World Bank, US
United Nations Office for Disaster Risk
United Nations Office for Project Services (Unops)
United Nations Habitat Secretariat
Regional Centre for Mapping of Resources
United Nations Development Programme (US)
Asian Development Bank
United Nations Environment Programme (Switzerland)
United Nations Environment Programme (Asia & Pacific)
The Collaborative Africa Budget Reform Initiative
UNDP Asia Pacific Regional Centre (Thailand)
UNDP Asia Pacific Regional Centre (US)
Foundations and NGOs
Bill & Melinda Gates Foundation US
Rockefeller Philanthropy Advisors (RPA)
Economic And Social Research Council (ESRC)
United Nations University - EHS
Open Society Foundations
Oxford Policy Management
Foundation Hans Wilsdorf
Childrens Investment Fund Foundation
New Venture Fund
University of Southampton
SouthSouthNorth (Africa) NPC
Wellspring Philanthropic Fund
The William and Flora Hewlett Foundation
Arcus Foundation (US Office)
Institute of Development Studies (IDS)
Engineering and Physical Sciences Research
International Union for Conservation of Nature (IUCN)
University Of Manchester
Schmidt Family Foundation
Arts & Humanities Research Council
Foundation to Promote Open Societies
Katholische Zentralstelle fur Entwicklun
University College London
International Rice Research Institute
Habitat for Humanity International
University of Copenhagen
University of Edinburgh
The Scottish Government
Environment for Development Initiative
International Development Research Center
Global Center on Adaptation
LTS International Ltd
New York University (NYU)
Global Green Growth Institute South Korea
World Vision Ireland
Alliance for Responsible Mining
IKEA Foundation Netherlands
The British Academy
Oak Philanthropy (UK) Limited
International Livestock Research Institute
Anglia Ruskin University higher education
European Climate Foundation
E3G United Kingdom
United Nations Environmental Programme
Biovision Foundation for Ecological Deve
Bernard Van Leer Foundation
University of Evora
Responsible Business Alliance Incorporation
United Cities and Local Governments
Mercy Corps USA
Water Witness International
Save the Children Australia
International Budget Partnership
Global Resilience Partnership
DAI Europe LTD
DAI Global LLC, USA
DAI Global Belgium SRL
ABF Investments PLC
Le Groupe-conseil Baastel ltée
SAGE Publications Ltd
E-SUD Development France
Rainforest Alliance Inc
Adelphi research gemeinnützige GmbH