2005 Annual Report

PADF

PAN AMERICAN DEVELOPMENT FOUNDATION

2005 ANNUAL REPORT

people&places

2

Program Areas

4

Facilitating Corporate Social Investing

6

south america programs

13

23 Donors and partners

24 Board of Trustees

25 Staff

26

32 How to Help

central america and caribbean programs

cover Photos: Karl Grobl

Financial Statements

Message from the Chairman of the Board

Message from the President and Executive Director

As the new OAS Secretary General, I welcome the oppor-

In its forty-third year of operations, the Pan American

tunity to serve as Chairman of the Pan American Develop-

Development Foundation expanded its development and

ment Foundation and further advance its vision of a hemi-

disaster assistance in Latin America and the Caribbean.

sphere of opportunity for all. PADF was the first nongov-

We continued to grow and implemented a budget of $25.8

ernmental organization created by an international agency.

million to provide economic opportunities, increase agri-

For over forty years, it has been an important instrument

cultural production, expand social services, mitigate and

of the Inter-American system for strengthening civil society

prevent disasters, strengthen civil society, and encourage

and promoting corporate social responsibility.

community participation.

PADF provides unique capabilities to the OAS that we

This 2005 report highlights the people with whom the

wish to further expand. It is a leader in assisting Colombia

Foundation collaborates, creating positive change for thou-

deal with the largest humanitarian crisis of displaced per-

sands of beneficiaries. Our partners include local nongov-

sons in the hemisphere. It aids the Haitian people by pro-

ernmental organizations, community groups, municipali-

viding jobs, reconstructing after floods, increasing commu-

ties, private enterprise, and most importantly, the people

nity participation, and promoting human rights by address-

we aim to serve.

ing trafficking in persons. It strengthens municipalities in

We are grateful to our donors in the public and private

Bolivia and facilitates cross-border cooperation along the

sectors—USAID, the World Bank, the OAS, and Colombian,

Dominican Republic-Haiti frontier.

Haitian, and Bolivian national agencies. PADF established

The Foundation provides an OAS vehicle for encourag-

several new alliances with other foundations and corpora-

ing private support to disaster relief, preparedness, and

tions. We are appreciative of support from newly elected

mitigation in coordination with the Inter-American Com-

OAS Secretary General José Miguel Insulza, and Assistant

mittee for Natural Disaster Reduction. This has been par-

Secretary General Ambassador Albert Ramdin.

ticularly important for enhancing our response capabilities

During the year, PADF was successful in winning the

in the Caribbean Basin. Through its civil society strength-

largest USAID grants in our history. These will allow us to

ening, PADF promotes democratic values and practices in

expand efforts to aid displaced persons, especially Afro-

accordance with the Inter-American Democratic Charter.

Colombians and other vulnerable groups, and former coca

Despite the ongoing recovery and improved regional

growers in support of Colombian initiatives to defend

prospects, the number of poor people has increased in

democracy and enhance social justice. In Haiti we received

recent years and per capita incomes have not shown major

new funding to generate employment, reconstruct after

improvements. There are 224 million poor, of which 96

devastating floods, and pioneer an innovative model of

million still live in extreme poverty. One quarter of our

community-driven development.

citizens survive on only two dollars a day. In response, we

The Foundation continues to increase corporate part-

must further consolidate our democracies, protect human

nerships to facilitate even greater private sector involve-

rights, and acknowledge that integral development is more

ment in our programs and further diversify funding. We

than just economic growth.

expanded our efforts to strengthen civil society as a key

In confronting the most critical challenges of poverty, social justice, democracy, natural disasters, and humanitar-

strategy for supporting democratic development.

We express our appreciation to the entire PADF team:

ian crises, the Foundation is addressing the highest priority

the Board, management, and staff, for their dedication,

issues. We are pleased to have a strong partner in PADF—

creativity, and hard work that allow us to serve disadvan-

one that dedicates its talent and resources to integral devel-

taged people in some of the most challenging areas of the

opment. We look forward to continuing the longstanding

hemisphere. It is through their commitment that our ben-

OAS-PADF partnership to better the lives of the poor while

eficiaries and partners experience success day after day.

strengthening our democracies.

Ruth Espey-Romero José Miguel Insulza

President, Board of Trustees

Secretary General, Organization of American States Chairman of PADF Board of Trustees

John A. Sanbrailo Executive Director

Karl Grobl

a He m i s p h ere of O pportun i t y for A ll

PADF carries out projects in four strategic program areas—creating economic opportunities; strengthening civil society; promoting social progress; and responding to natural disasters. In 2005, our staff served lowincome communities throughout the region from offices in Colombia, Haiti, Bolivia, El Salvador, the Dominican Republic, and Washington, D.C. With over four decades of experience in the region, PADF has established a strong network of regional and local partners, including nongovernmental organizations; municipal, state, and national governments; community-based groups; the private sector; and individuals. PADF provides technical and managerial expertise to design and execute innovative, cost-effective approaches to development.

Our special relationship with the OAS makes PADF a unique nonprofit partner within the Inter-American system, with access to exceptional leaders, hemispheric initiatives, and facilities for rapid implementation of technical assistance and material donations. PADF’s long history of partnerships with private enterprise allows us to facilitate corporate social investing and leverage resources, increasing developmental impacts for thousands of communities.

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Creating Economic Opportunities

Promoting Social Progress

Employment generation is a fundamental priority for PADF.

In 2005, PADF’s Health Services and Tools for Training pro-

The best way to help individuals and their families is to

grams distributed over $2.2 million worth of medical/dental

provide resources and training to generate jobs and increase

equipment and tools to organizations in Bolivia, Peru, Colom-

incomes. PADF programs support micro- and small enter-

bia, Costa Rica, and Uruguay. The Health Services program

prises, improve agricultural conditions and techniques, con-

placed donated medical and dental equipment valued at over

serve natural resources, and expand community infrastruc-

$700,000 in hospitals, clinics, and NGOs serving disadvan-

ture. In all our programs, PADF targets those most in need,

taged populations.

whether they are impoverished, displaced by civil conflict, or

Since 1966, Tools for Training has assisted low-income indi-

disadvantaged because of economic, racial, or ethnic preju-

viduals at vocational-technical schools. In 2005, PADF distrib-

dices. PADF programs work directly with local people to cre-

uted $1.5 million in donated tools and equipment, improving

ate sustainable employment through a variety of innovative

the capacity of training institutions to teach marketable skills to

activities. PADF also supports the necessary conditions for

students of all ages. This year, major donations were received

economic growth, such as basic rural infrastructure and the

from Caterpillar, Cornwell Quality Tools, and the Danaher Tool

participation of local citizens.

Group, Ajax Tool Works, and Reed Manufacturing through the

Initiatives to create economic opportunities in 2005

Second Helping Foundation.

included the following:

PADF placed contributions of equipment and tools through:

o Employment and Income Generation for Internally

o Health Services/Medical Equipment Donations (Colombia,

Displaced Persons (Colombia)

Bolivia, Peru, Uruguay)

o Alternative Development for Ex-Coca Farmers (Colombia)

o Tools and Skills Training (Colombia, Peru, Costa Rica)

o Employment Generation and Microenterprise (Bolivia, Colombia, El Salvador, Haiti)

Responding to Natural Disasters & Humanitarian Crises

o Sustainable Agriculture and Natural Resource

PADF is the nongovernmental disaster relief arm of the OAS,

Management (Colombia, Haiti)

mobilizing relief funds from private sector partners such as

o Rural Infrastructure Development (Bolivia, Colombia,

Citigroup, Caterpillar, Kraft, Chevron, etc.; reconstructing and

El Salvador, Haiti)

rebuilding; and training communities to better prepare for the next disaster. PADF emphasizes community-based prepared-

Strengthening Communities and Civil Society

ness and mitigation, training local disaster committees and

A fundamental ingredient for healthy, vibrant democracies is

other groups in emergency management, vulnerability map-

community participation in government and civil society. PADF

ping, early flood alert warning systems, and search and res-

strengthens community-based groups, nongovernmental orga-

cue. PADF builds working relationships between civil defense

nizations (NGOs), and municipalities, enhancing local capacity

agencies, municipalities, communities, and chambers of

to implement appropriate solutions for development needs.

commerce to strengthen local capacity to respond in times of

PADF also partners with immigrant groups to channel funding

crisis. We participate in the Working Group of the Inter-Ameri-

for transnational development projects in their communities of

can Committee on Natural Disaster Reduction, a mechanism

origin. Our programs encourage and support the involvement

to guarantee institutional coordination and information-shar-

of civil society actors and local governments in the prevention

ing for disaster management.

of human rights abuses such as the cross-border trafficking of

PADF also responds to humanitarian crises, demonstrated

children in Haiti and the Dominican Republic.

by employment generation for internally displaced persons in

The following projects strengthened civil society in 2005:

Colombia and the protection of rights of Haitian children traf-

o Civil Society Strengthening (Bolivia, Colombia, Cuba,

ficked into domestic servitude.

Dominican Republic, El Salvador, Haiti, Venezuela)

In 2005, PADF worked on the following initiatives:

o Transnational Development through Immigrant

o Disaster Mitigation and Preparedness (Costa Rica, Colom-

Community Remittances (El Salvador, Haiti)

bia, Trinidad & Tobago, Haiti, and the Dominican Republic)

o Combating Trafficking in Persons (Haiti, Dominican Republic)

o Emergency Disaster Relief (Guyana, Haiti, Grenada, and Cuba)

o Municipal Strengthening (Bolivia, Regionwide)

o Rehabilitation and Reconstruction (Dominican Republic, Haiti)

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F a c i l i tat i n g Corporate So c i al In v e s t i n g PADF has partnered with the private sector as part of its mission and original charter since 1962, mobilizing corporate and other private funds that contribute to sustainable local development solutions, as described in this section.

Stanford Financial Group and its subsidiary, Caribbean Star

Altria Group, Inc. and Philip Morris International helped the

which strengthens NGOs and implements community-based,

town of Jímani, Dominican Republic, recover from flood-

cross-border projects.

Airlines, funded the construction of a pedestrian bridge between the Haitian and Dominican border towns of Anse à Pitre and Pedernales, which depend on each other for trade and commerce. The bridge also symbolizes cross-border ties, supports hurricane reconstruction, and bolsters PADF’s border program funded by USAID, Fwontye Nou/Nuestra Frontera,

ing that affected the central market, a hub for the region’s 20,000 people who depend on the market for their liveli-

Banco Agrícola, the largest private bank in Central America,

hoods, including Haitians from the town of Anse à Pitre.

partnered with PADF and Salvadorans in the United States

PADF and Fundación Sur Futuro rehabilitated the market with

to improve education in El Salvador. This innovative alliance

funding from these companies and their Dominican partner,

helped build classrooms in local schools, environmental cen-

Grupo León Jimenes. New walls and market stands were

ters, and computer centers, and with additional funds from

constructed, the building’s electricity and plumbing were

USAID, provided school supplies and training to rural school-

restored, and a committee was formed to oversee the market’s

children and teachers.

The project was a win-win-win: the bank increased its

future management. The reconstruction symbolized the recovery of cross-border economic activity and how corporations

remittance market share and expanded its financial services;

can socially invest in rural trade and microenterprise.

the communities benefited from improved access to and quality of education; and PADF promoted economic and social

Caterpillar Inc. has supported PADF for several years through

development in El Salvador.

general support contributions and in-kind donations of vocational-technical tools and equipment. In 2005, with Costa

Chevron Corporation has partnered with PADF for many

Rican partner APTAMAI, PADF placed Caterpillar tools in

years on a number of initiatives throughout the region.

three Costa Rican vocational-technical schools in areas with

Most recently, Chevron responded to flooding and hurricane

high rates of unemployment and poverty, so graduating stu-

damage in the Caribbean through a grant of $130,000 that

dents could better access jobs.

helped PADF target some of the most affected areas, including Grenada, Jamaica, and the Bahamas. Chevron has also

After Hurricane Ivan struck the Caribbean in late 2004, decimating the island of Grenada, Caterpillar donated a 20

supported school reconstruction in El Salvador and a training

kilowatt generator to operate a large hospital that services

center in Colombia.

much of the island’s population.

Occidental Petroleum Corporation, through the El AlcaraCitigroup Inc. works through its long-standing partnership

van Foundation, partnered with PADF in Colombia to assist

with PADF to address humanitarian and development needs

displaced persons in the Department of Arauca. A Multi-

in the region. This includes support of PADF’s work in Colom-

purpose Community Center, including a virtual library, was

bia to assist persons displaced by violent civil conflict through

constructed and equipped. The grant also provided technical

a Microcredit Revolving Fund, which grants credit to finance

training, credit, and employment in construction, tailoring,

productive activities of 3,000 displaced Afro-Colombians,

leather, and craft works, and provided related services benefit-

many of whom are women heads of household. Citigroup Inc.

ing over 2,100 low-income persons. Oxy Colombia contributed

also supported the Traces of Hope School, serving the dis-

$630,000 and PADF provided $300,000 through a USAID grant

placed community in Malambo, Colombia.

to assist displaced persons. The municipality of Arauca and the El Alcaravan Foundation also contributed, with the latter managing the center to serve additional beneficiaries and ensure self-sufficiency.

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“

Citigroup has a strong and dynamic relationship with PADF, built on many years of trust and positive results for all involved, especially disadvantaged people in the region. Together we are working to make a difference in communities across Latin America and the Caribbean.

”

—Whitney M. MacEachern, Director of Social Responsibility and Communications at Citigroup Latin America and the Caribbean

Beneficiaries of Banco Agricola’s contribution to education projects in El Salvador

“

Jimaní market ribbon cutting with Philip Morris

“

Caterpillar has distributors and operations throughout Latin America. We value the scope of PADF’s work to create jobs, rebuild infrastructure, and offer skills training and other economic opportunities. We value their work and know that with operating funds, PADF can continue to provide services for disadvantaged people throughout the region.

”

—Tom Gales, Vice President Latin America Division, Caterpillar, Inc.

The Altria family of companies, including Philip Morris International, has a long and successful history of partnership with the Pan American Development Foundation in identifying programs and projects aimed at substantially improving the quality of life in communities across the Americas. PADF has a proven track record of experience and expertise in identifying meaningful programs that deliver tangible results and that has been the key to our relationship over the years.

— Richard Reavey, Director, Corporate Affairs, Philip Morris Latin America & Canada

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”

Colombia

c ountr y pro g ra m s — s out h a m er i c a

After decades of civil war, armed conflict continues in many parts of Colombia. In these regions, residents are harassed and sometimes killed, and youth are at risk of being coerced to join armed groups. There is little economic activity and people suffer from an acute lack of employment. The situation has forced up to 3 million people—many of them women and children—to flee their communities and livelihoods in search of safety. These Internally Displaced Persons (IDPs) find themselves in precarious circumstances with no jobs, shelter, food, water, or access to basic necessities.

In this unstable environment, PADF is working to help the most vulnerable people: IDPs, former coca producers, and indigenous groups. In 2005, PADF continued its successful programs and initiated further efforts to respond to the difficult situation in Colombia. New partnerships with international organizations, nongovernmental organizations, and corporate donors are allowing PADF to work with displaced persons in Colombia and neighboring countries and to reach out to indigenous groups in the areas surrounding two national parks.

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Programs for Internally Displaced Persons PADF leads Colombia’s most comprehensive employment and income generation program for Internally Displaced Persons. In 2005, PADF achieved 140 percent of its goal, serving over 107,000 displaced Colombians—with women, children, and Afro-Colombians receiving priority attention. PADF provides

over one million displaced and vulnerable

Five Years of the Colombia IDP Program in Numbers: o 404,000 IDPs served o 58,000 jobs created o 41,000 people

a range of creative employment solutions:

trained in job skills

small business incubation, support for com-

Colombians during its five-year duration from 2005-2010. The PADF-International Organization for Migration (IOM) alliance—PILAS—jointly operates the Integrated Humanitarian Assistance Support to Internally Displaced Persons and Other Vulnerable Groups project and is funded by a $115.9 million grant from USAID. In September 2005, PADF was awarded a subgrant by IOM with funding from the

munity enterprises, microcredit, job training for private

State Department’s Bureau for Population, Refugees, and

sector placement, creation of community productive

Migration for assistance to Colombian displaced fami-

centers, organization of cooperatives, integration of

lies across borders in Panama, Ecuador, and Venezuela.

families with other economic and social service provid-

PADF’s portion of this program, approximately $500,000,

ers, and agricultural work for families returning home

will focus on technical and vocational training and

or relocating to safer areas.

income generation.

With an investment of $20.7 million by USAID in fis-

New 2005 activities with the private sector included

cal year 2005, PADF leveraged $17.3 million more from

ABCD Español, a literacy initiative supported by Citi-

community, public, and private sources. We mobilized

group and implemented in various projects supported

support from over 175 stakeholders, including the private

by PADF. For instance, ABCD Español was part of Fun-

sector and local, departmental, and national government

dación Natura’s return and relocation project for nearly

bodies. PADF has worked with over 80 Colombian NGOs

500 indigenous Embera–Wounnan families.

in three-fourths of the country’s departments.

For the second year, Philip Morris contributed to a food

In 2005, PADF began a new alliance that will help

David Mangurian, inter-american development bank

security project implemented with the Colombian Coffee

7

South Americ a Programs Federation to benefit 5,600 IDPs and vulnerable coffee

settlers will benefit. PADF allied with two NGOs, the

growing families in the department of Cundinamarca.

Amazon Conservation Team (ACT) and the Pro-Sierra Nevada Foundation, for a new three-year, $4 million

Alternative Development for Colombian Coca Farmers

USAID-funded project.

Alternative development is a strategy to help farmers of

Alliance for Disaster Management

illicit coca crops successfully convert to legal crops and

PADF collaborates with the American Chamber of Com-

other productive employment. By the end of 2005, PADF

merce (AmCham) in Colombia, engaging the private

had worked with 2,000 families in the departments of

sector in a Disaster Management Committee. This com-

Bolívar, Antioquia, Santander, and Cordoba to eradicate

mittee works with national emergency management

over 1,170 hectares of coca and plant more than 5,530

authorities to conduct successful and innovative vulner-

hectares of alternative, legal crops. PADF continued to

ability reduction projects in high-risk communities. In

implement an innovative activity in collaboration with

2005, the community-based mitigation projects imple-

the Colombian government’s Familias Guardabosques

mented in Colombia, such as school retrofitting and an

program, which helps families living near forests eradi-

earthquake preparedness program, totaled $75,000, of

cate their coca. PADF contributes alternative plant mate-

which $29,000 was donated by participating companies,

rial, sets up nurseries and family plots, and provides

in addition to contributions of time and technical assis-

technical assistance and training to help the families

tance. Colombia is one of three pilot countries partici-

grow legal crops for food and sale. This collaboration

pating in the regional Alliance for Disaster Management

has resulted in a low-cost expansion of our alternative

with funding provided by USAID’s Office of Foreign

development program to several hundred additional

Disaster Assistance (OFDA).

recipients.

In-Kind Giving Program

Early in 2005, PADF embarked on a new collaboration with Associates in Rural Development, Inc. (ARD)

PADF’s In-Kind Health Services and Tools for Training

to develop a five-year, $189 million alternative devel-

programs provided Colombian institutions and NGOs with

opment and local government strengthening project

$832,000 in in-kind donations in 2005. The Health Services

known as ADAM, of which PADF will implement a $50

Program facilitated the delivery of critical basic services

million subcontract.

to the poor by matching donated U.S. medical and dental equipment with the needs of hospitals, clinics, and NGOs

Managing Natural Resources in National Park Buffer Zones

that serve low-income populations. In Colombia, a total of

In two areas surrounding national parks—Sierra Nevada

tions serving victims of the civil conflict.

$32,000 in donated medical equipment supplied organiza-

de Santa Marta in the Magdalena and La Guajira Depart-

Tools for Training facilitated donations of new and

ments and Alto Fragua in Caquetá—PADF is helping

used vocational tools to Colombian technical training

indigenous and campesino communities protect the parks’

schools. The total in-kind donations were valued at

natural resources while developing income and agricul-

$800,000, and will be used to train students for jobs in

tually based livelihood activities for them and local settlers

general mechanics and maintenance, automotive repair,

and improving relations between these two groups. Some

plumbing, electrical work, and carpentry. Donations

2,600 families experiencing the encroachment of illicit

placed in Colombia came from one of the programs

crops and improper farming techniques applied by

major donors, Cornwell Quality Tools, among others.

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world bank

Bolivia Political instability and persistent poverty continue to challenge development efforts in Bolivia, South America’s poorest nation. Poverty is compounded by long-term issues such as profound inequality for the indigenous population, an economic slump, and widespread political disenchantment. Many departmental, provincial, and municipal governments are weak organizationally and technically, and consequently, the private sector and local organizations have played an expanded role in economic investment and development.

In Bolivia, PADF is responding to the democratic and social challenges with programs that enhance peaceful civic participation in democratic governance and improve participatory development and economic opportunities through rural municipal government initiatives. PADF programming is also strengthening Bolivia’s capacity to better absorb international donor assistance.

Supporting Community Participation and Development in Bolivia

reduces conflict through community development; pro-

Working in partnership with Casals & Associates,

issues of national importance; and supports emerging

Inc., PADF implemented activities under Iniciativas

moderate indigenous leaders. Though the initiative is

Democráticas (Democratic Initiatives), funded by

national in scope, PADF’s office and program’s activi-

USAID’s Office of Transition Initiatives. The program

ties are concentrated in the city of El Alto, home to

motes peaceful dialogue; disseminates information on

9

South Americ a Programs Bolivia’s largest concentration of urban indigenous poor

200 small grants totaling over $8 million. As a result of

and an area which has seen considerable violence and

its success, the initiative was extended through Septem-

unrest during recent years. Bolivian organizations such

ber 2006.

as women’s associations, youth groups, and other com-

PADF is also working with the Bolivian government’s

munity-based organizations receive grants and techni-

Productive and Social Investment Fund (FPS) on a

cal assistance for a range of rapid-response activities:

World Bank-funded program that assists municipalities

school and water system rehabilitation, skills training,

and communities in implementing rural and semi-rural

and income and employment generation. By the end of

development projects throughout Bolivia. Working

2005, Iniciativas Democráticas had supported more than

closely with the FPS, PADF staff provides technical support and assistance to municipal governments for small projects in irrigation, dairy production, agriculture, agro-forestry, and community infrastructure. The projects are intended to increase economic productivity, thereby leading to an improved quality of life for rural residents. PADF is currently helping to implement more than 150 such projects totaling more than $8 million.

In-Kind Giving In 2005, the Health Services program donated $352,000 in U.S. medical and dental equipment to deserving institutions in Bolivia, including a university medical school that serves low-income patients. Materials and equipment included X-Ray equipment, examination tables and lights, dental chairs, and lab equipment.

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projects in partnership with Altria Group, Inc./Philip

Brazil

Morris International. This private sector program works through local NGOs to provide computers for rural children, teach vocational skills, and support education and literacy programs through teacher training and reading initiatives. In 2005, contributions from Altria Group totaled over $170,000.

PADF provided scholarships for low-income, Peruvian students to attend the country’s premier technical institute, TECSUP, with funding from the Hampshire

Peru

David Mangurian, inter-american development bank wilhelm heintz, inter-american development bank

In Brazil PADF supports a variety of educational

Foundation. Deserving students received $85,000 in scholarship funds to attend TECSUP’s Arequipa campus, where they are learning skills to increase their job opportunities.

PADF’s Health Services program donated $135,000 in in-kind medical and dental equipment to Peruvian organizations and institutions serving low-income populations. Donations were placed with health care providers in remote areas of the Amazon jungle region where medical equipment and services are in short supply.

PADF’s Tools for Training program supplied technical and vocational schools with new and used tools used to teach disadvantaged Peruvians valuable job skills. In 2005, the regional government of Piura received a total of $96,000 in donations to assist technical education.

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David Mangurian, inter-american development bank

South Americ a Programs

year program to strengthen

2005, PADF donated $8,750,

donated U.S. medical and

citizen and community

which in turn leveraged

dental equipment to deserv-

groups in Venezuela through

$700,000 in medical equipment and supplies with the help of the Embassy of Guyana, Counterpart International, and Humanity First.

PADF worked with national authorities in Guyana to distribute medical supplies to physicians and medical clinics serving those affected by the flooding in the low-lying regions of the country.

ing institutions in Uruguay, supplying several hospitals in major cities. The new 170-bed hospital, El Circulo Católico de Obreros del Uruguay, was equipped with electrical hospital beds and patient room furniture such as bed tables, night stands, and companion chairs.

PADF also supplied medical equipment, including defibrillators, EKG machines, and anesthesia machines.

The hospital serves 60,00070,000 mostly low-income people.

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Venezuela

In 2005, PADF began a two-

gram provided $148,000 in

Uruguay

PADF’s Health Services pro-

ing in Guyana in December

Guyana

In response to severe flood-

small grants and technical assistance in several areas, such as democracy, human rights, the environment, justice, transparency, and civic participation.

Haiti

Karl Grobl

c entral a m er i c a an d t h e c ar i b b ean

Haiti suffers from political, social, and economic instability, with four out of five Haitians living in abject poverty. The Haitian people face severe unemployment and underemployment. About 50 percent live in rural settings, and most depend on small-scale, subsistence agriculture for their livelihoods. Fiercely proud of their status as the first black republic of the “new world” and struggling to implant a modern democracy, Haitians are extraordinarily self-reliant and possess a strong and vibrant culture.

Active in Haiti since 1978, PADF has a three-pronged strategy: first, wealth creation, such as assistance for the production and marketing of traditional crops; second, productive infrastructure development such as farm-to-market roads, schools, and irrigation systems; and third, the strengthening of civil society through activities such as civic participation in local development, human rights advocacy, and community disaster mitigation and preparedness.

Job Creation as Hope in Marginalized Areas

with little police presence and few basic services. Our

In May 2005, PADF began a USAID-funded solid waste

program’s success stems from innovative partnerships,

management program in the Port-au-Prince area. Project

particularly with the Yéle Haiti—the new foundation of

Lari Pwop, or “Clean Streets,” created over 1,400 jobs and

Haitian-born, U.S. hip-hop star Wyclef Jean. Wyclef’s

a more stable, orderly backdrop for the 2006 national elec-

branding through jingles, song competitions, and visits has

tions. PADF is operating in two dangerous neighborhoods

created public acceptance for this initiative in these oth-

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Central Americ a and the Caribbean erwise impenetrable areas. Our other partner, CARE/Haiti, is providing valuable hygiene and civics training to the workers.

This year, PADF collected and delivered more than 84,000 cubic meters of waste to the official dump site—enough waste to fill an Olympic-size swimming pool over 200 feet

communities received small grants for

Hillside Agriculture Program in Numbers (2005): o 58,582 beneficiaries o 22.9% increase in

crop revenue (equal to $1.14 million)

deep. Due to the project’s success, USAID extended the program to February 2007 to include rehabilitation of schools and other community infrastructure.

o $830,000 export

products sold o $795,000 farmer

Sustainable Agriculture and Natural Resource Management in Haiti

loans facilitated by PADF

infrastructure, social, and productive projects through democratically elected community councils that prioritize and monitor projects proposed and managed by the community.

This program trained over 150 people from community associations, state ministries, local banks, churches, and the police in project design and implementation and created over 3,100 jobs for local residents.

Project examples include the rehabilitation of farm-to-market roads, water and soil conservation projects on hillsides subject

PADF is a major partner in the USAID-funded Hillside Agri-

to erosion, cassava production, and the cleaning and

culture Project (HAP). Our outreach work is recognized as

repair of drainage canals. This community empower-

an important factor in the project’s success in increasing

ment model has been so successful that the Govern-

sustainable jobs, rural crop yields, and incomes. Through

ment of Haiti is expanding it nationally, with PADF as a

technical assistance and training of farmers’ associations,

key partner.

cooperatives, and agribusinesses, HAP has significantly improved several important aspects of the high-value crop

Rural Infrastructure Development in Haiti

industry, from production to marketing. HAP activities

With funding from USAID, PADF successfully reha-

have fundamentally changed the terms of trade for farm-

bilitated irrigation canals in Jean Rabel, an important

ers, allowing local producers to retain a greater percentage

plantain-growing area in the drought-stricken Northwest

of the retail price of mangoes, coffee, and cocoa. In 2005,

Department. Over the year, 166 hectares of highly pro-

mango farmers received higher prices and new buyer

ductive land were brought back under cultivation, add-

contracts were signed. Many local agricultural actors have

ing to more than 280 hectares already recovered. Retain-

taken on new intermediary roles in the country’s agricul-

ing walls were built and trees were planted along the

tural marketing system, generating significant employ-

hillsides, protecting the system from collecting silt and

ment. Also, three groups of mango producers and three

making 150 hectares of hillside more productive.

Through an innovative partnership with the private

groups of exporters received organic certification, and over

foundation Yéle Haiti (founded by Wyclef Jean) and

288 hectares of high-value mangoes were planted.

ComCel (Haiti’s largest mobile phone operator), PADF

The program has rejuvenated Haiti’s exports of premium specialty coffees including the Haitian Bleu® brand

received $250,000 for school rehabilitation in the

sold in the United States, Europe, and Japan, supported

Gonaïves area. Using matching funds from USAID,

by a new Website (www.haitian-bleu.com). Farmers saw

20 schools were substantially rehabilitated. Each school

direct results: a price increase per pound of coffee and

also received teacher training and scholarships for the

over 100,000 coffee plant seedlings produced and sold. In

neediest students from additional Yéle Haiti/Comcel

partnership with the M&M Mars Corporation, the cocoa

grants to partner NGOs.

component of HAP distributed 130,000 plant seedlings and established six demonstration plots visited by 620 farmers.

Tropical Storm Reconstruction In September 2004, the city of Gonaïves, Haiti and its

Community-Driven Development in Haiti

environs were hit hard by Tropical Storm Jeanne. Large

In 2005, PADF continued the Community-Driven Devel-

parts of the city were devastated, as were roads, canals,

opment program funded by the World Bank. Three

and hillsides between Gonaïves and Port de Paix to the

14

Karl Grobl

northwest, and between Gonaïves and Ennery going

TIP program also strengthens government and civil soci-

north. PADF is rebuilding 13 kilometers of the main

ety groups on advocacy and policy reform through joint

road from Port-au-Prince to Cap-Haïtien, constructing

activities launched with UNICEF and local NGOs. This

two bridges over tributaries running into Trois Rivières

USAID-funded program successfully advocated for the

on the secondary road, rehabilitating some 26 kilome-

ratification of the Inter-American Convention against

ters of this same road, and training seven local disaster

Trafficking of Minors.

protection committees. PADF is working as part of a

In addition, PADF organized and trained ten monitor-

USAID-funded consortium led by CARE to reconstruct

ing and action committees to undertake anti-trafficking

and rehabilitate the area. PADF also helped restore doz-

activities at the local level. These groups have met with

ens of irrigation canals and watersheds as part of an

local candidates for the lower and upper houses of the

agreement with DAI.

Dominican Parliament, advocating for laws to criminalize trafficking. As a part of TIP’s public information and

Protecting Children’s Rights

media campaigns, PADF held awareness seminars with

PADF has been combating human trafficking between

370 community leaders, students, educators, journalists,

Haiti and the Dominican Republic since 2003. The

clergy, and consular officers in the border towns. One-

Trafficking in Persons (TIP) program addresses the

and-a-half million people have seen or heard the print

trafficking of Haitian children for domestic servitude

and radio messages disseminated by PADF.

(restavèk), as well as cross-border trafficking of both

The TIP program also responds to trafficking victims,

adults and children. PADF trains those responsible for

rescuing and providing shelter for trafficked children.

monitoring and preventing trafficking of persons, reach-

PADF aided in the repatriation of 3,000 Haitians and

ing about 400 government officials and 450 NGO and

assisted children in three group shelters in Haiti and

media representatives on both sides of the border. The

four shelters in the Dominican Republic.

15

Su c c e s s Empowering Communities in Haiti In Ouanaminthe, a border town in Haiti’s northeast region, PADF’s Community-Driven Development

program empowered the community to select and implement their own development project, a community irrigation system to help the resident farmers.

One local farmer who used to grow sorghum, a low yield, risky crop, was able to switch to growing cabbage. He told a visiting World Bank representative, “Now with the available water, I am planting cabbage, a cash crop with a secure market. I invite you to return here next year, and I am telling you, I will be as rich as you.” The irrigation system has created new possibilities for this farmer and others like him.

The positive economic impacts of the irrigation project inspired the community to expand the system to reach nearly 90 hectares of land and to construct a cart to transport the irrigation pump and necessary pipes from one site to another. They refer to the system as “Sé zafè pa nou” (“This is our own business”). Ownership and leadership are the cornerstones of community empowerment, and are among the important steps toward good governance and stewardship.

Partners for Salvadoran Schools Martín Martínez is the treasurer of a San Francisco-based immigrant association that participated in the ALCANCE primary education program to help a school in Santa Elena, El Salvador. He reported that collaborating with PADF was the first time his association felt they were working in partnership with a development organization. “I have always thought that for everyone to feel good about a project, it is important that all the players are taken into account and that everyone decides together. This is the first time that a project was done that way. In the history of my group, organizations came and said they wanted our help with something, but told us how and under what conditions. Things don’t turn out well when done that way. However, with PADF, it has been beautiful.

We have been consulted.”

Immigrant associations like Martín’s are voluntary, and members find the time to raise money, manage documentation, and coordinate education projects on top of their fulltime jobs. Martín says that working with PADF, he and others learned about organizing and administrating community development projects.

16

Karl Grobl

Stor i e s A Changed Man in the Dominican Republic Angel Jimenez had no interest in traveling and certainly not to Haiti. In his capacity as the manager of the town banking cooperative in a Dominican border town, Angel helped PADF set up initial meetings with local community groups for its Fwontyè Nou–Nuestra Frontera program. Still, he did not see the point of a cross-border initiative.“If the Haitians stay on their side of the border and we stay on ours, everyone will be happy,” he told us.

Today Angel is a changed man. Fwontyè Nou–Nuestra Frontera’s cross-border exchanges and work to promote binational cooperation have prompted Angel to visit the Haitian town of Anse à Pitre regularly and to recruit Haitians into his bank cooperative. When Angel traveled to Port-au-Prince to represent his community at the national border priority workshop and saw the Haitian capital for the first time, he said, “There was no way I would have missed this opportunity.”

Saving Resources in Bolivia In the Department of Cochabamba, the community of Caviloma is seeing the benefits of their new irrigation system. The new canals not only cut down on labor; they also reduce the amounts of water and electricity needed.

In the old earthen ditches, a large portion of the irrigation water seeped into the ground before ever reaching the crops. The new system carries more water to the crops even though less water is now pumped out of the wells, saving From Gang Member to Businessman in Colombia the community both water and electricity.

For three years now, Fernando Piedrahita has owned a successful business One community leader and beneficiary marketing cleaning and cafeteria products in Medellín. But ten years ago, he said, “Thank you for making this dream a lived a very different life. He belonged to a gang he and his friends formed reality. Before, our grandparents and our to protect their neighborhood against the violence and extortion of other fathers had to work hard to clean the irrigangs in the area. “To join a gang was a way to survive,” explains Fernando. gation ditches before we could water the Fernando is one of the thousands of young people from the marginal zones crops. With the new canals, we have the of Medellín who have benefited from the FENIX Project, funded by USAID and possibility to earn more for our children. run by PADF and the Family Compensation Fund of Antioquia (COMFAMA). The When we pass on, the next generation FENIX project reintegrates gang members and other at-risk youth into society will be able work this land and educate through activities and services such as job training, technical assistance, psytheir own children.” Over three quarters cho-social assistance, entrepreneurial support, community service, a microof the small projects supported by PADF loan fund, and health care. throughout Bolivia improve community Fernando learned how to run a small business and received a micro-loan to irrigation systems, helping farmers stabistart his company. For Fernando and the other young people, the FENIX Projlize and increase crop yields. ect gave them real avenues to change their lives for the better. “I’m very grateful to the FENIX Project, because it’s not just a matter of believing, but providing opportunities,” says Fernando.

17

Dominican republic–Haiti

Karl Grobl

Central Americ a and the Caribbean

On the island of Hispaniola, the border between the Dominican Republic and Haiti divides the two countries and their disparate languages, cultures, and economies. Whereas Haiti’s problems have left many of its people in abject poverty, the Dominican Republic has had the fastest growing economy in the region and is positioning itself to compete in the global economy. The border represents both a shared history of conflict and mistrust as well as a frontier of opportunity. PADF is working to bridge this divide and help create economic opportunities in the region by building the capacity of local organizations to better address border issues such as human trafficking, poverty, health, and the environment; to reach out to their cross-border neighbors; and to attract resources.

Building a Cross-border Community Along the Haitian-Dominican Border

for communities and NGOs. PADF organized a series of

PADF’s five-year, $3.25 million program Fwontyè Nou–

identify potential funding sources; to link Haitian and

Nuestra Frontera (Our Border) funded by USAID helps

Dominican NGOs through meetings on women’s repro-

local organizations create economic opportunities and

ductive health, human rights, and anti-trafficking; and

reduce conflict in the border region.

to discuss the region’s priorities for development with

In 2005, a large part of the effort focused on creating cross-border communication and providing resources

workshops to bring together Dominican border NGOs to

local NGOs, local government officials, the military, and cross-border representatives.

18

This regional process of prioritization and planning

endorsed the program’s recommendation to form a high-

culminated in national seminars in both the Haitian

level task force to determine how best to develop the

and the Dominican capitals, with substantial national

border region. The national workshop in Haiti focused

and international involvement that impacted the policy

on raising awareness of economic potential in the border

debate in both countries. Community representatives pre-

region and encouraging the Haitian government and the

sented their findings to the President of the Dominican

international community to invest there.

Republic and to the Haitian Minister of Foreign Affairs,

Since the project began in 2004, PADF has leveraged

respectively. Following the presentations, Dominican

$2.0 million in complementary funding and strength-

President Leonel FernĂĄndez asked local representatives to

ened local organizations, while working with national

develop a strategic plan for the border area and requested

governments and international donors to attract addi-

assistance from the OAS to help monitor human rights

tional resources to the border.

Karl Grobl

along the border. In a subsequent meeting, the President

19

El Salvador

Central Americ a and the Caribbean

Despite the socioeconomic progress El Salvador has made over the last decade, the country still struggles with inequality and must continue to reduce poverty and improve its overall economic growth. While urban areas are densely populated and industrialized, rural areas are often left behind when it comes to economic opportunities and social services such as education.

Remittances sent back to the country from Salvadoran immigrants living abroad provide 17 percent of the country’s Gross Domestic Product. PADF partners with the private sector and Salvadoran associations in the United States to channel community remittances to development initiatives focused on rural education in an effort to increase access to and improve the quality of education.

Transnational Development Initiative: Immigrant Remittances for Development

and the private sector—most notably, Banco Agrícola

PADF’s Transnational Development Initiative supports

to carry out a wide range of educational projects in El

U.S.-based immigrant groups working to improve

Salvador.

and its remittance transfer subsidiary, BANAGRICOLA—

education and infrastructure, generate jobs, increase

Through the ALCANCE program (Alliance of Com-

incomes, and provide sustainable opportunities in their

munities Supporting Children and their Continuation

communities of origin. In 2005, PADF worked with

in Education), PADF supported rural schoolchildren in

immigrants from El Salvador with funding from USAID

partnership with USAID and over 20 Salvadoran com-

20

munities in the United States. Other partners included

Manos Unidas por El Salvador (Hands United for

World Vision, the Fundación Empresarial para el Desar-

El Salvador) is a corporate social investment program

rollo Educativo, and Banco Agrícola.

created by PADF and Banco Agrícola. Six educational

ALCANCE provided direct assistance to over 12,000

projects were implemented by local committees in El

rural primary schoolchildren in 77 schools with school

Salvador in 2005, working in coordination with Sal-

supplies, books, uniforms, shoes, and other interven-

vadoran immigrant groups based in Los Angeles and

tions that improved the quality of classes, supported

Washington, DC. These projects included constructing

attendance and retention of students, and involved

classrooms, equipping a computer lab, building an envi-

families in the learning activities of their children.

ronmental education facility, providing vocational train-

ALCANCE surpassed all goals related to direct student

ing, and installing an environmental resource center

assistance and successfully maintained the alliance with

in a local school. Eight other projects were chosen for

all participating immigrant groups, many of whom have

implementation in 2006. In addition, the program builds

continued their support for beneficiary schools after the

the capacity of immigrant groups through technical

close of the program in June 2005.

assistance and training in project design, fundraising, and institutional development.

21

wilhelm heinz, inter-american development bank

Central Americ a and the Caribbean With funding from USAID’s Office of Foreign Disaster Assistance (OFDA), Costa Rica is one of

Costa Rica

Alliance for Disaster Management. In 2005, activities being implemented with the American Chamber of Commerce (AmCham) included first aid training for corporate, community, and national authorities and the development of an emergency disaster protocol for the AmCham disaster management committee.

The community disaster mitigation projects implemented in Costa Rica, such as equipping an ambulance and creating an emergency voucher program for the employees of a local company, totaled at least $25,000. The project leveraged matching corporate contributions as well as time and technical assistance from institutional and corporate representatives.

Also, PADF’s Tools for Training program deliv-

Trinidad & Tobago

the pilot countries participating in the regional

Trinidad and Tobago is one of three pilot

ered vocational-technical tools valued at $648,000

countries participating in the regional Alli-

to APTAMAI, a Costa Rican association that helps

ance for Disaster Management funded by

disadvantaged people gain job skills and start their

USAID’s Office of Foreign Disaster Assis-

own small businesses. Tools were used to teach skills

tance (OFDA). PADF collaborates with the

such as automotive repair, plumbing, electrical work,

American Chamber of Commerce (AmCham),

and carpentry. The Tools for Training program is sup-

providing disaster management training to

ported through contributions from benefiting NGOs,

private enterprises; mobilizing corporate

national governments, municipalities, the U.S. corpo-

contributions for disaster preparedness, miti-

rate sector, and other civic groups.

Cuba

jonathan french, world bank

gation, relief, and recovery; and promoting partnerships between corporations and the communities in which they do business.

In 2005, the projects being implemented

in Trinidad & Tobago, such as community preparedness training and a joint simulation exercise, were worth at least $60,000, half of which was donated from participating companies. In addition to the resources for community initiatives, the project leveraged contributions of time and technical assistance from institutional and corporate representatives in project activities.

PADF supports the development of civil society in Cuba

by providing independent groups with books, materials, and other resources.

22

our d onor s an d partner s

PADF is grateful to the individuals, corporations, foundations, government agencies, multi-lateral institutions, and other entities whose generosity and support during Fiscal Year 2005 made our work possible.

Major Partners U.S. Agency for International Development (USAID) The World Bank Group Organization of American States (OAS)

Major Contributors Altria Group, Inc. Asociación Colombiana de Exportadores de Flores (ASOCOLFLORES)* Asociación de Productores de Cacao del Sur de Bolívar (APROCASUR)* Banco Agrícola, S.A. Bondi Foundation/Geoffrey Bible Caja de Compensación Familiar de Antioquia (COMFAMA)* Caribbean Star Airlines Caterpillar Inc. and Caterpillar Foundation Chevron Corporation Citigroup Inc./Citigroup Foundation Cornwell Quality Tools* Corporación Minuto de Dios* Danaher Inc.* Ecopetrol Ruth Espey-Romero Federación Nacional de Cafeteros de Colombia* Fundación Corona* Fundación El Alcaravan* Fundación Mario Santo Domingo* Fundación San Isidro* Greenberg-Traurig LLP* The Hampshire Foundation Occidental Petroleum Corporation PCI Communications, Inc.* Philip Morris International

Programa Familias Guardabosques de la Presidencia de la Republica de Colombia Shelby Cullom Davis Foundation Stanford Financial Group, Inc. The William H. Donner Foundation Yelé Haiti Foundation/Comcel

Key Public Sector Partners Acción Social – RSS Cabot Colombiana* Comfamiliar de la Guajira* Cornare – Rionegro Corporación Acción por Bolivar* Embassy of Guyana to the United States Fondo de Inversión para La Paz (FIP) Fondo IFI – Fomwayuu Fondo Productivo Social de Bolivia (FPSB) Fundación Codesarrollo* Fundación Colombia Presente* Fundación Éxito Fundación Natura* Fundación Rioclaro* Gobierno Regional de Piura Government of ColombiaDepartmental Governments of Arauca, Antioquia, Córdoba, La Guajira, Tolima, Atlántico, Bolívar, Santander Ministry of Agriculture Government of the Dominican Republic Dirección General de Desarrollo Fronterizo Government of Haiti– PL-480 Management Office Ingreco Ltda.* Instituto Colombiano de Bienestar Familiar (ICBF) Instituto de Ciencias Aplicadas* Instituto Interamericano de Cooperación para la Agricultura (IICA) Interconexión Eléctrica Municipalidad Provincial de Caballo Cocha Prodepaz* Programa de Desarrollo y Paz de Magdalena Medio (PDPMM) Servicio Nacional de Aprendizaje (SENA) United States Agency for International Development (USAID)

United States Defense Reutilization and Marketing Office U.S. General Services Administration* More than 100 municipalities in Colombia

Friends of PADF Rogelio Adame American Chamber of Commerce of Colombia American Chamber of Commerce of Costa Rica American Chamber of Commerce of Guyana American Chamber of Commerce of Haiti American Chamber of Commerce of the Dominican Republic American Chamber of Commerce of Trinidad and Tobago Americas Relief Team APTAMAI Argentine Business Council Asociación Miguelina Siglo XXI Association of American Chambers of Commerce in Latin America (AACCLA) Bank Boston Esther Beal BP Juan Canahuati Chalchupanecos y Amigos Residentes en Los Estados Unidos y Canadá (CHARUSCA) Charles Delmar Foundation Círculo Católico de Obreros de Uruguay Citibank El Salvador Club Amigos de Sesori Colombian American Chamber of Commerce Comité Amigos de Santa Elena Comité de Desarrollo de Uluazapa y sus Vecindades (CODEUZ) Comité Pro Paz y Reconstrucción de Cacaopera (COPRECA) Comite Pro-Guatajiagua Comité Pro-Mejoramiento Amigos de Chiquirín Comité Pro-Mejoramiento de Cantón Piedras Blancas Comite Pro-Mejoramiento de Chapeltique Comité Pro-Tejutla Comité Salvadoreño El Piche Comité Unido Pro-Playa de El Tamarindo en Virginia

23

Comunidad Unida de Chinameca Comunidad Unida de El Pilón Comunidades Unidas Salvadoreñas (CUS) Corporación Antioquia Presente Counterpart International John Currelly Sam Del Brocco Dell Direct Giving Program Arthur Dohrman Dr. Conaghan James Fendell Friends School of Baltimore Fundación Salvadoreña de Florida Inc. Fundación Sur Futuro G.O.A.L. International Global Impact Francis Gomez Audrey Grubbs Grupo León Jimenes Nadine Hogan Instituto Clemente Estable International Youth Foundation (IYF) Kraft Foods, Inc. Evelyn Litaud Danny McDaniel Robert McGee James Michel Mission Relief Services* Robert Moore Mortgage Investors, Inc. New York City Transit Authority Employees Pro-Chapeltique 2002 S. Rafofsky Esther Rawlinson John Sanbrailo Seaboard Marine Sociedad Pro-Niño Salvadoreño Sonsonate 2000 Suddath Relocation Systems Starbucks Coffee Company Tufts University United for Colombia United Way Universidad Autónoma Juan Misael Saracho UPS Foundation Beverly Jo Van Slyke Visión Chalateca Alexander Watson Tanya Williams David Winfield Anita Winsor-Edwards World Vision Partner communities in all the countries where PADF works

*In-kind

b oar d an d s taff

PADF Board of Directors From October 1, 2004 through September 30, 2005

Officers José Miguel Insulza Chairman Secretary General, Organization of American States Albert R. Ramdin Vice Chairman Assistant Secretary General, Organization of American States Ruth Espey-Romero President Shareholder, GreenbergTraurig LLP Carlos Mariño Garcia 1st Vice President President, Avantel, S.A. (Colombia) James Michel 2nd Vice President Senior Counsel, DPK Consulting Maston N. Cunningham Treasurer Past President, AACCLA Past President, Occidental Petroleum in Ecuador and Perú Yolanda Mellon Suarez Secretary Chief of Staff, Stanford Financial Group

Board Members Alejandro Aguirre Deputy Editor and Publisher, Diario Las Américas Rafael Argüelles Former President, Massalin Particulares, S.A. (Argentina) Philippe R. Armand President and CEO, Dynamic International Trading Corporation (Haiti) Kathleen Barclay President of AACCLA (incoming) Principal, Asesorias KCB, Ltda.

(Chile)

Lula Rodriguez Director, Citigroup Corporate Affairs Citigroup Latin America

Juan M. Canahuati President and CEO, Lovable Group (Honduras) Howard Chase Vice President, European Government Affairs, BP Corporation (Belgium)

Rodolfo Schildknecht President, Banco Agrícola (El Salvador)

Sam Del Brocco President, PCI Communications, Inc. James Fendell President of AACCLA (outgoing) President, Aerocasillas-Aeropost (Costa Rica) Thomas Gales Vice President, Latin America Division, Caterpillar, Inc. William D. Gambrel Past President of AACCLA Former President, BankBoston S.A.—A FleetBoston Company (Colombia) Francis D. Gómez Past PADF President Executive Director Corporate Communications, Educational Testing Service

Alexander F. Watson Managing Director, Hills & Company Past PADF President Aaron S. Williams Vice President International Business Development, RTI International David J.S. Winfield Executive Director, Toronto Centre Former Canadian Ambassador to Mexico (Canada) Anita Winsor Edwards Trustee, The William H. Donner Foundation & Donner Canadian Foundation

Nadine Hogan President, Hogan and Associates Eleanor Jones Managing Director and Consulting Principal, Environmental Solutions Ltd. (Jamaica) Whitney M. MacEachern Director of Social Responsibility and Community Relations, Citigroup Latin America and the Caribbean Robert McGee President, Occidental International Corporation Past PADF President Ali Moshiri President, Chevron Latin America (Venezuela) Pablo Gabriel Obregón Santo Domingo President of Board, Fundación Mario Santo Domingo (Colombia)

Sandra Taylor Senior Vice President of Corporate Social Responsibility, Starbucks Coffee Company

Howard F. Zuckerman Former Executive Vice President of Finance and CFO, Bell Atlantic Corporation, Mexico

Advisory Committee Francisco Aguirre Co-Publisher, Diario Las Americas Frank Aldrich Kenneth Gordon Chairman, Caribbean Communications Networks (Trinidad and Tobago) Jack Heller Partner, Heller & Rosenblatt Past PADF President of the Board William Kimberly Naztec, LLC Guy A. Lavigueur (Canada) Antonio López de Silanes Chairman, CEO, Laboratorios Silanes (Mexico)

24

Robert Moore Former Counsel, International Banana Association Jeannie Mulford Essex House (U.K.) Roberto Murray Meza Former President, La Constancia S.A. (El Salvador) R. Danny Williams Chairman, Ravers Limited (Jamaica) Curtin Winsor, Jr. Trustee, William H. Donner Foundation

OAS Secretaries General and Chairmen José A. Mora, 1962-1968 Galo Plaza, 1968-1975 Alejandro Orfila, 1975-1984 João Clemente Baena Soares, 1984-1994 César Gaviria Trujillo 1994-2004 Luigi Einaudi, Acting, 2004 José Miguel Insulza, 2005-present

Board Presidents William Sanders, 1962-1972 T. Graydon Upton, 1972-1977 L. Ronald Scheman, 1977-1983 R. I. Jervis Jones, 1983-1985 Leveo Sanchez, 1985-1988 J. John Jova, 1988-1990 Robert M. McGee, 1990-1992 George M. Kroloff, 1992-1995 Jorge Ríos, 1995-1997 Jack Heller, 1997-2000 Alexander F. Watson, 2000-2002 Francis D. Gómez, 2002-2004 Ruth Espey-Romero, 2004-Present

Executive Directors L. Ronald Scheman, 1962-1968 Sy Rotter, 1968-1974 Norman Goijberg, 1974-1977 Michael D. Miller, 1977-1980 Edward Marasciulo, 1980-1988 Marvin Weissman, 1988-1990 Peter Reitz, 1990-1997 Frederick Schieck (acting), 19971998 Sarah Horsey-Barr, 1998-1999 Robert Moore (acting), 1999 John Sanbrailo 1999-present

Dale Crowell Director of Communications

André F. E. (Rico) Nicolas Coordinator, Jean-Rabel Irrigation Jean Mary Dutreuil Technical Supervisor, Schools

Management

Corrie Drummond Coordinator, Transnational Programs

John Sanbrailo Executive Director

Valeria Merino-Dirani Senior Civil Society Advisor

Amy Coughenour Betancourt Deputy Director

Marc Wachtenheim Program Director

Terrence Brown Senior Programs Director

Louis Varela Logistics Manager

Accounting and Administration

Raquel Orellana Program Assistant

Staff Washington , D . C .

Jack Bluestein Director, Finance & Administration Walter Cortés Controller Elsa Leopold Finance & Personnel Officer

Frantz Joseph Program Director

Sandra Pérez Office Manager

Claude Labossière Director of Administration and Finance

Holly Flood Director, South America Programs Allison Erdle Director, Corporate Partnerships & Development Luis Enrique Lazo Director, Health & Tools Program Christine Herridge Director, Disaster Management

Plus 85 additional staff Dominican Republic Daniel O’Neil Project Director, Our Borders

Haiti

Daissy Moreno Finance Associate

Programs

Gabriel Léger, Coordinator, Disaster Programs, Jacmel

C aribbean

John Currelly Resident Representative

Luis Castillo Office Assistant

Gary Filippi Coordinator, World Bank CDD, Anse à Pitre

Erin Upton-Cosulich Program Assistant

Miriam Castedo Finance Associate

Liliana Ostria Administrative Associate

Macorel Saint Elien Coordinator, World Bank CDD, Ouanaminthe

Joseph Félix Regional Director (Region 1) Cesáreo Guillermo Veloz Regional Director (Region 2)

central america El Salvador

Martial Bailey Project Director, PADF/Trafficking in Persons Erick Déryce Project Director, Solid Waste Removal in Port-au-Prince

Katherine Andrade Eekhoff In-Country Director, ALCANCE Víctor Ernesto Girón C. PADF Representative, Manos Unidas por El Salvador

south america Colombia John Heard Country Director Carlos Urquidi Deputy Director for Finance Gilberto Amaya Deputy Director for Programs Luis Fernando Sanz Director, Internally Displaced Persons Programs Ricardo Amaya Director, Alternative Development Programs Hector Cortez Director for Administration Fanny Jorge Director for Grants and Contracts Luis Antonio Ordóñez Director of Communications and Corporate Relations Compliance Jesus Bastidas Regional Director, Northeastern Antioquia (AD) José Félix Montoya Regional Director, Southern Bolívar (AD) Plus 99 additional staff Bolivia

Gherda Kersaint Director, Finance & Administration, PADF/Hillside Agriculture Program Joanas Gué Coordinator, Field Crops PADF/ Hillside Agriculture Program Alphonse D. Nkunzimana Coordinator, PADF/Trafficking in Persons

25

Maria Eugenia Vera PADF Project Director, Iniciativas Democráticas Javier Burgos PADF Project Director FPS/ World Bank Project

f i nan c i al s

Pan American Development Foundation Financial Statements For the Year Ended September 30, 2005

Management’s Discussion and Analysis (MD&A)

The difference between the $1.36 million net reduction in

This section provides management’s view of the results of

fiscal year 2005 and the $0.5 million net reduction in fiscal

operations and financial condition of the Pan American Devel-

year 2004 is explained primarily by two factors: 1) as the In-

opment Foundation (PADF) for fiscal year 2005 compared

Kind gifts are restricted by the donor for distribution to those

with fiscal year 2004. The MD&A highlights the most signifi-

in need outside of the United States, accounting for nonprofit

cant elements of the foundation’s financial and operating per-

organizations requires revenue recognition upon receipt of

formance during the period October 2004 to September 2005.

in-kind equipment, and expense recognition when shipped out or disposed of; and 2) during 2004 and more markedly in

Results of Operations

2005, PADF pursued a strategy of reducing operating expenses

PADF’s revenue increased in 2005 to $25.8 million, up 18%

and inventory for the In-Kind program, both of which

from the 2004 total of $21.9 million. The increase was primar-

improved operations. As a result, the shipping of equipment/

ily due to a growth of USAID-funded projects in Haiti, and

tool inventory meant non-cash increases in expenses and a

continued implementation of large projects in Colombia.

decline in total assets.

Program expenses increased 19% to $23.6 million in

Supporting services expenses increased to $3.6 million in

2005 from $19.8 million in 2004. Most of this increase was

2005, from $2.8 million in 2004. The resulting overhead costs

proportionate with the growth in revenue from public sector

supported all of the Foundation’s management and program

grants, except for the In-Kind program. This program receives

expenses, and this overhead rate (management and general

equipment/tools and donates them to nongovernmental

expenses divided by qualified program services expenses)

organizations (NGOs) throughout the hemisphere. Expenses

was one of the lowest among comparable international NGOs

related to the Foundation’s In-Kind donations are determined

operating in Latin America and the Caribbean.

by the value of medical-dental equipment and “tools for training” shipped during the fiscal year. Expenses to cover

Financial Condition

costs of warehousing, shipping, handling, and importing for

Total assets at September 30, 2005 were $6.0 million, com-

each In-Kind project are provided by sponsors. In the State-

pared with $6.3 million at the end of the prior fiscal year.

ment of Activities for fiscal year 2005, expenses recognized

While PADF’s end of year cash position was up $0.7 million

from equipment shipped significantly exceeded the revenues

($2.3 million vs. $1.6 million at September 30, 2004), total

from donated equipment (by $1.36 million), as shown in the

assets were lower primarily as a result of the $1.3 million

table below: This resulted in a reduction of assets which was

decline in the value of “undesignated in-kind goods.”

Total liabilities increased $1.2 million year over year, pri-

approximately $0.8 million more than the comparable amount in fiscal year 2004.

($ in Thousands)

2005 2004 In-Kind Revenue (Receipts) $ 969 $ 920 In-Kind Expenses Shipments 2,207 1,432 Disposals 122 — 2,329 1,432 Contribution from In-Kind Activities $ (1,360) $ (512)

marily as a result of higher “refundable advances from grantors” (which explains the cash increase).

The reduction in net assets from fiscal year end 2004 to fiscal year end 2005 was $1.4 million, primarily from a decline in In-Kind goods shown as “temporarily restricted funds” in the Statement of Activities.

John A. Sanbrailo

Patricia Manyari

Executive Director

Finance Director

March 2006

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Fiscal Year 2005 Financial Audit

STATEMENT OF FINANCIAL POSITION September 30, 2005 (With Summarized Financial Information as of September 30, 2004)

To the Board of Directors of the

Pan American Development Foundation

2005

2004

ended. These financial statements are the responsibility of the

ASSETS Cash and cash equivalents $ 2,310,252 $ 1,619,456 Accounts and grants receivable 542,617 255,207 Advances to subcontractors 990,772 1,202,947 Strategic Development Fund 731,151 732,082 Prepaid expenses and other assets 678,238 369,708 Project inventory 40,053 103,329 Undesignated in-kind goods, net of allowance 528,181 1,888,538 Property and equipment, net 220,609 101,787

Foundation’s management. Our responsibility is to express

an opinion on these financial statements based on our audit.

LIABILITIES AND NET ASSETS Accounts payable and accrued expenses $ 913,258 $ 439,679 Refundable advances 2,087,974 1,383,871

We have audited the accompanying statement of financial position of the Pan American Development Foundation (the Foundation) as of September 30, 2005, and the related statements of activities, functional expenses and cash flows for the year then

The prior year summarized comparative information has been derived from the Foundation’s 2004 financial statements and, in our report dated November 30, 2004, we expressed an unqualified opinion on those financial statements.

We conducted our audit in accordance with auditing stan-

TOTAL ASSETS

$ 6,041,873

$ 6,273,054

TOTAL LIABILITIES 3,001,232 1,823,550

Commitments and Contingencies Net Assets Unrestricted 1,966,723 2,232,221 Temporarily restricted 1,073,918 2,217,283

dards generally accepted in the United States of America.

TOTAL NET ASSETS 3,040,641 4,449,504

Those standards require that we plan and perform the audit to

TOTAL LIABILITIES AND NET ASSETS

$ 6,041,873

$ 6,273,054

obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes

STATEMENT OF CASH FLOWS

examining, on a test basis, evidence supporting the amounts

(With Summarized Financial Information for the Year Ended September 30, 2004)

For the Year Ended September 30, 2005

and disclosures in the financial statements. An audit also

Increase (Decrease) in Cash and Cash Equivalents

includes assessing the accounting principles used and signifi-

cant estimates made by management, as well as evaluating

CASH FLOW FROM OPERATING ACTIVITIES Change in net assets $ (1,408,863) $ Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities Depreciation 111,456 Allowance for obsolete inventory 305,541 Donated goods (968,966) Changes in assets and liabilities Accounts and grants receivable (287,410) Advances to subcontractors 212,175 Prepaid expenses and other assets (308,530) Undesignated in-kind goods 2,023,783 Project inventory 63,275 Accounts payable and accrued expenses 473,579 Refundable advances 704,103

the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the 2005 financial statements referred to above present fairly, in all material respects, the financial position of the Pan American Development Foundation as of September 30, 2005 and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Raffa, P.C. Washington, DC December 9, 2005

2005

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

2004 (737,002) 85,947 187,459 (920,028) (101,227) (158,106) (269,910) 1,244,596 158,638 76,747 183,544

920,143

(249,342)

CASH FLOW FROM INVESTING ACTIVITIES Proceeds from sales of Strategic Development Fund Purchases of Strategic Development Fund Acquisitions of property and equipment

350,000 (349,067) (230,280)

300,000 (186,005) (160,190)

NET CASH USED IN INVESTING ACTIVITIES

(229,347)

(46,195)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

690,796

(295,537)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,619,456 1,914,993 CASH AND CASH EQUIVALENTS, END OF YEAR $ 2,310,252

$ 1,619,456

NONCASH OPERATING ACTIVITIES Inventory-donated

$

27

$

968,966

920,028

STATEMENT OF ACTIVITIES

EXPENSES FY05

For the Year Ended September 30, 2005 (With Summarized Financial Information for the Year Ended September 30, 2004)

Unrestricted

Temporarily Restricted

2005 Total

Management and General 13.0%

2004 Total

Fundraising 0.2%

Promoting Social Progress 9.9%

REVENUE AND SUPPORT Grants $ 20,363,066 $ 1,200,441 $ 21,563,507 $ 18,060,266 Individual and corporate contributions 1,318,671

— 1,318,671 1,754,458 Subcontract revenue 1,018,311

— 1,018,311 954,980 In-kind contributions

— 968,966 968,966 920,028 Other income 664,242

— 664,242 50,330 Shipping reimbursements/subsidies 151,540

— 151,540 106,063 Program income 133,864

— 133,864 57,378 Net assets released from restrictions: Satisfaction of program restrictions 3,312,772 (3,312,772) — —

Creating Economic Opportunities 51.6%

Responding to Natural Disasters 10.2% Strengthening Communities and Civil Society 15.1%

TOTAL REVENUE AND SUPPORT 26,962,466 (1,143,365) 25,819,101 21,903,503

SOURCES OF REVENUE FY05

EXPENSES

Program Services Creating Economic Opportunities 14,048,124 Strengthening Communities and Civil Society 4,103,947 Responding to Natural Disasters 2,784,643 Promoting Social Progress, predominantly in-kind designations of inventory in 2005 2,702,998

Total Program Services 23,639,712

— 14,048,124 15,538,852 — 4,103,947 1,528,262 — 2,784,643 714,886

Grants 83.5%

— 2,702,998 2,043,854 — 23,639,712 19,825,854

Supporting Services Management and general 3,543,252 Fundraising 45,000

— 3,543,252 2,814,651 — 45,000

—

Total Supporting Services 3,588,252

— 3,588,252 2,814,651

TOTAL EXPENSES 27,227,964

— 27,227,964 22,640,505

Other Income 2.6% Shipping Reimbursements and Subsidies 0.6% Program Income 0.5%

Change in Net Assets (265,498) (1,143,365) (1,408,863) (737,002)

NET ASSETS, BEGINNING OF YEAR 2,232,221 2,217,283 4,449,504 5,186,506 NET ASSETS, END OF YEAR

$ 1,966,723

$ 1,073,918

$ 3,040,641

Subcontract Revenue 3.9% Individual and Corporate Contributions 5.1% In-kind Contributions 3.8%

$ 4,449,504

STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended September 30, 2005 (With Summarized Financial Information for the Year Ended September 30, 2004)

Program Services

Creating Strengthening Responding to Economic Communities Natural Opportunities and Civil Society Disasters

PVO subproject expense $9,375,458 Salaries and benefits 2,518,133 Operations and material support 2,042,282 Donated inventory designations — Consultants and professional fees 9,025 Travel and related expenses 24,497 Project vehicles and equipment 72,451 Inventory disposals — Shipping and related expenses 5,791 Telephone and fax 178 Conference and meetings — Other general expenses 309 Farmer outreach grants —

Total Expenses $14,048,124

$1,814,577 $1,667,038 1,147,289 465,435 623,975 430,167 — — 237,723 133,932 132,003 56,573 94,584 14,060 — — 18,410 16,760 22,307 498 1,482 — 11,597 180 — — $4,103,947 $2,784,643

Promoting Social Progress

$228,425 53,356 51,786 2,206,870 3,440 6,839 636 122,452 27,341 1,753 — 100 — $2,702,998

Supporting Services

Total Program Management Services and General Fundraising

$13,085,498 $— 4,184,213 1,770,947 3,148,210 1,066,213 2,206,870 — 384,120 392,049 219,912 197,419 181,731 39,228 122,452 — 68,302 23,394 24,736 34,493

1,482 15,601 12,186 3,908

— — $23,639,712 $3,543,252

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$— 45,000 — — — — — — — — — — — $45,000

Total Supporting Services

$— 1,815,947 1,066,213 — 392,049 197,419 39,228 — 23,394 34,493 15,601 3,908 — $3,588,252

Total 2005

Total 2004

$13,085,498 $11,123,904 6,000,160 5,007,634 4,214,423 3,113,404 2,206,870 1,432,055 776,169 968,163 417,331 416,016 220,959 277,699 122,452 — 91,696 51,555 59,229 130,894 17,083 99,398 16,094 13,398

— 6,385 $27,227,964 $22,640,505

Notes to the Financial Statements 1. Organization and Summary of Significant Accounting Policies Organization Created in 1962 through a unique agreement between the Organization of American States (OAS) and the private sector, the Pan American Development Foundation (the Foundation) is an independent, non-profit organization incorporated in Washington, D.C., that creates public-private partnerships to assist the least advantaged people in Latin America and the Caribbean. The Foundation engages community-based groups, non-governmental organizations (NGOs), municipal governments and the private sector in the process of implementing appropriate solutions for sustainable development. Through these partnerships, the Foundation seeks to achieve excellence and lasting programmatic impacts in creating economic opportunities; promoting social investments; strengthening communities and civil society; and responding to natural disasters.

Cash and Cash Equivalents Cash and cash equivalents include funds in checking accounts and investments purchased with an original maturity of three months or less. Certain cash and cash equivalents are considered to be restricted for United States Agency for International Development (USAID) programs with the exception of the Foundation’s general fund checking and board reserved accounts. Total restricted cash and cash equivalents were $2,185,565 as of September 30, 2005.

Advances to Subcontractors Advances to subcontractors, in most cases, consist of amounts provided to subcontractors of $250,000 or more to execute project objectives within a three month period.

Strategic Development Fund Investments in the Strategic Development Fund are carried at market value. Changes in the market value are included in other income in the accompanying financial statements.

Project Inventory Project inventory consists of seeds and tools purchased for creating economic opportunities for use by farmers in the Colombia Alternative Development project.

Undesignated In-kind Goods In-kind goods consist of donated health service equipment and tools inventory and is valued at the fair market value at the date of donation. This inventory is capitalized until such time as it is distributed for its particulate purpose. Such “designated” inventory is then expensed and, in 2005, over $2.3 million has been included in the “Promoting Social Progress” program.

Property and Equipment Property and equipment are being depreciated using the doubledeclining method over estimated useful lives of three to five years, with no salvage value. In years prior to 2004, the Foundation depreciated property and equipment using the straight-line method over the estimated useful lives. Expenditures for major repairs and improvements are capitalized; expenditures for minor repairs and maintenance costs are expensed when incurred. Upon the retirement or disposal of assets, the costs and accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is included in revenue or expenses. For purposes of calculating the indirect cost rate, any gains/losses resulting from the disposal of assets are recorded as a reduction/increase to total indirect expenses.

Classification of Net Assets The net assets of the Foundation consist of two categories, and are as follows: o Unrestricted net assets represent the portion of expendable funds that are available for support of the Foundation’s operations. o Temporarily restricted net assets are restricted by grantors for specific purposes.

Revenue Recognition The Foundation has grants with U.S. Government agencies and foreign governments. Revenue from the grants is recognized as costs are incurred on the basis of direct costs plus allowable indirect costs.

Grant awards received but not yet expended for the purpose of the grant are reflected as refundable advances on the accompanying statement of financial position.

The Foundation reports contributions as temporarily restricted support if they are received with donor or grantor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

Financial contributions to support the shipping of health and tools supplies and equipment are recorded as shipping reimbursements/ subsidies in the Statement of Activities.

The Foundation reports contributions of health and tools supplies as temporarily restricted revenue when received as these goods are received with donor stipulations that limit their use. When the goods are designated by the Foundation to a potential recipient, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

The Foundation recognizes revenue in its World Bank Project in Bolivia based on the progress of three phases of activities for over 160 municipal projects. The first phase, project evaluation, is billed when completed for each project. The second phase, project

29

implementation, is billed simultaneously with Bolivian government disbursements to complete the work; and the third phase, project evaluation and closeout, will be billed upon completion of each project. Amounts expended but not yet billed are included in accounts and grants receivable on the accompanying statement of financial position and totaled $200,000 as of September 30, 2005.

Functional Allocation of Expenses The Foundation charges salaries to various programs and supporting services based upon the actual amount of time worked in each area.

Fringe benefits and indirect costs are allocated to various programs based on total direct salaries and total direct costs, respectively.

Transactions in Foreign Currencies Foreign currency transactions are translated into U.S. dollars at current exchange rates except revenues and expenses that are translated at average exchange rates during each reporting period. Exchange gains and losses resulting from foreign currency transactions are included in operations and material support in the statement of functional expenses.

Credit Risk The Foundation maintains cash deposits with major banks in the United States, which from time to time may exceed federally insured limits. The Foundation also maintains cash deposits totaling $1,916,023 in Latin America and the Caribbean, which are not insured and are subject to foreign currency fluctuation and potential bank failure. The Foundation periodically assesses the financial condition of the institutions and believes that the risk of any loss is minimal.

Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

2. Strategic Development Fund The Strategic Development Fund was presented as the Capital Reserve Account in the financial statements for the year ended September 30, 2004 and prior years. The name change from the Capital Reserve Account to the Strategic Development Fund (SDF) was approved by the Board of Directors at the Foundation’s Annual Meeting held on September 22, 2005.

Investments in the SDF as of September 30, 2005 consisted of the following: Money funds (UBS Cash Fund) $ 281,151 Preferred securities1 450,000 Total $ 731,151 Preferred securities, short-term (7 day maturity or less), carrying an average interest rate of approximately 4% as of September 30, 2005.

1

As of September 30, 2005, the Foundation’s general fund owed the Strategic Development Fund $226,000 for the World Bank/FPS project and $104,000 for the Foundation’s office space in the OAS building.

3. Undesignated In-kind Goods Undesignated in-kind goods consist of the following inventory on hand as of September 30, 2005: Tools for Training $ 342,383 Health Services Equipment 242,798 Allowance for obsolete inventory (57,000) Total $ 528,181 4. Commitments and Contingencies Provisional Indirect Cost Rates Billings under cost reimbursable government grants are calculated using provisional rates that permit recovery of indirect costs. These rates are subject to audit on an annual basis by the Foundation’s cognizant agency. The audit results in the negotiation and determination of the final indirect cost rates which may create a liability for indirect cost recovery billed in excess of the actual rates or may allow for additional billings for unbilled indirect costs.

The Foundation has instructed its independent auditors to audit the costs related to U.S. Government funds for the years ended September 30, 2005 in accordance with Circular A‑133 issued by the U.S. Office of Management and Budget (OMB). USAID has yet to audit the rate for the year ended September 30, 2005. Management believes that matters arising from USAID’s review of the independent auditors’ report for 2005 will not have a material effect on the financial position of the Foundation.

Operating Lease The Foundation has a ten year, non-cancelable operating lease with the Organization for American States (see note 7) for office space which commenced on April 1, 2004. The lease was modified in 2005 to account for CPI increases in the Washington, D.C. area and to incorporate additional space required into the agreement. The future minimum payments due under this lease are as follows: For the Year Ending September 30, 2006 $ 220,896 2007 220,896 2008 220,896 2009 220,896 2010 220,896 Thereafter 883,584 Total $ 1,988,064 Rent expense for the year ended September 30, 2005 was $236,001.

30

5. Net Assets As of September 30, 2005, the temporarily restricted net assets are dedicated to the following purposes: Promoting Social Progress $ 588,400 Creating Economic Opportunities 317,606 Strengthening Communities and Civil Society 140,874 Responding to Natural Disasters 27,038 Total $ 1,073,918 6. Restrictions on Net Assets Net assets were released from program restrictions by incurring expenses satisfying the restricted purposes. For the year ended September 30, 2005, net assets released from restrictions were as follows: Satisfaction of program restrictions: Promoting Social Progress $ 2,503,952 Creating Economic Opportunities 328,030 Responding to Natural Disasters 327,319 Strengthening Communities and Civil Society 153,471 Net Assets Released from Program Restrictions $ 3,312,772 7. Concentration of Risk Federal Grants During 2005, the Foundation earned grant revenue of $20,796,558 or indirectly through a pass-through grant from the U.S. Government.

The U.S. Government grant funding was predominantly from USAID. Additionally, the Foundation reported revenue from the donation of goods of $239,897 from the U.S. General Services Administration (GSA). Revenue earned from USAID and the GSA represented approximately 80% of the total revenue recognized by the Foundation for the year ended September 30, 2005.

Foreign Operations The Foundation has field offices in various developing countries, namely: Colombia, Haiti, Dominican Republic and Bolivia, to work with USAID and World Bank representatives and with corporate donors, local groups and non-governmental organizations on various programs for the purpose of providing assistance to persons displaced by violence; vocational training for low-income people; agroforestry programs to promote soil conservation and reforestation; medical equipment and supplies to health care facilities throughout the regions; tools for vocational training; disaster assistance to address the most critical needs of disaster victims and to better prepare them for future natural disasters. The future results of these programs could be adversely affected by a number of potential factors such as currency devaluations or changes in the political climate.

8. Related Party Transactions The Foundation, while separate from the Organization of American States (OAS), has a working agreement with the OAS (approved by the OAS General Assembly) under which the Foundation received in 2005 a grant of $178,058, consisting of $122,499 for general support and $55,559 in temporarily restricted support. Under the agreement, the Permanent Council of the OAS appoints a representative to the Foundation’s Executive Committee. In addition, two of the 30 trustees of the Foundation are officials of the OAS General Secretariat.

9. Retirement Savings Plan The Foundation maintains a defined contribution retirement savings plan for all qualified employees who have met certain length of service requirements. The Foundation makes contributions in an amount which equals 10% of all full-time permanent employees’ base salaries. These contributions are immediately vested. Upon termination, death, or retirement, employees are entitled to the current value of the contributions in their accounts. Retirement savings plan expense totaled $137,822 for the year ended September 30, 2005, and is included in salaries and benefits in the statement of functional expenses.

10. Income Taxes Under Section 501(c)(3) of the Internal Revenue Code, the Foundation is exempt from the payment of taxes on income other than net unrelated business income. As of September 30, 2005, no provision for taxes is required, as the Foundation had no net unrelated business income.

11. Summarized Financial Information The financial statements include certain prior year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the Foundation’s financial statements for the year ended September 30, 2004, from which the summarized information was prepared.

31

h o w to h elp

Online Donations

The Pan American Development Foundation depends on contributions from government and multilateral donors, corporations, foundations, and individuals to carry out its work.

By developing partnerships between the public and the private sectors, PADF ensures sustainable programs that support the disadvantaged throughout Latin America.

Please contact your tax advisor to learn more about how you can direct your donations. There are many ways to give to PADF:

Donate online at PADF’s Website: www.padf.org

Check and Money Order Checks or money orders can be sent to PADF, 1889 F Street NW, 2nd Floor, Washington, DC 20006.

The following gifts and their tax-deductibility are subject to current tax laws. Please consult your tax advisor for further guidance:

Bequests The most common and simplest planned gift is a bequest

Karl Grobl

made to PADF through a donor’s will or living trust. PADF can provide you with suggested language for a bequest to the Foundation.

Stock or Tangible Property Donations of stock, appreciated real estate, and/or property can be made to PADF to be used to support its programs.

Life Insurance When you donate a life insurance policy, the premiums paid on the policy are tax-deductible if PADF is made the irrevocable owner and beneficiary of the policy.

Trusts PADF and its bank’s tax experts can work with you to structure a charitable trust that best suits your needs and interests.

Contact Information The Pan American Development Foundation is a registered 501(c) (3) organization. Contributions made to PADF are taxdeductible under U.S. law. The applicability of these laws can vary, so donors are encouraged to seek tax advice. In other countries, tax laws should be consulted concerning the deductibility of a gift.

For more information, please contact the Pan American Development Foundation, 1889 F Street NW, Washington, DC 20006; phone 202-458-3969; email padf-dc@padf.org

32

The mission of the Pan American Development Foundation is to increase opportunity for the disadvantaged in Latin America and the Caribbean. We seek to help people and communities achieve economic and social progress and respond to natural disasters and humanitarian crises. We do this through innovative partnerships with private, public, and nonprofit organizations in support of the priorities of the Organization of American States.

A proud affiliate of the Organization of American States

PADF

PAN AMERICAN DEVELOPMENT FOUNDATION

1889 f Street NW, 2nd floor Washington, DC 20006 TEL 202-458-3969 Fax 202-458-6316 PADF-DC@PADF.org www.PADF.org