OPEN_SOCIETY_FOUNDATION_L - Accounts

The directors present the strategic report for the year ended 31 December 2021.

Open Society Foundation London (OSF London) is a “not-for-profit” and is part of the Open Society Foundation network “family” of organizations and receives grant funding from sources within the network equal to its net expenditure.

OSF London works in partnership with other organizations within the Open Society Foundation network to promote open society values worldwide. Programs run in 2021 by OSF London in partnership with other Open Society Foundation network organizations include

• Africa Regional Office

• Economic Justice Program

• Education Program

• Eurasia Program

• Human Rights Initiative

• Independent Journalism Program

• Information Program

• International Migration Initiative

• Open Society Initiative for Europe (Migration and Inclusion Unit)

• Open Society Justice Initiative

Information on the work of these programs is available at www.opensocietyfoundations.org.

Because OSF London receives grant funding equal to its net expenditure the surplus for the financial period and equity at year end are equal to the value of tangible assets less lease incentive liabilities.

OSF London has secure grant funding arrangements and therefore does not face significant business risks.

This is the Section 172 report of Open Society Foundation London.

Open Society Foundation London works in close alignment and collaboration with the Open Society Foundations global network to further its objective “to promote open society values worldwide.” The company’s sole member is Open Society Institute, based in the United States.

Key stakeholders

As a grant-making foundation, our key stakeholders are our grantees and staff.

Grantees

The Open Society Foundation London awards grants scholarships, and fellowships to organizations and individuals who share open society values, who have a vision, and whose efforts will lead to lasting social change. Building long-term relationships of trust with the organizations we support, and understanding their health, effectiveness, and resilience is a core element of our approach to organization-centered grant making. This understanding enables staff to make better decisions about if and how to provide funding to help organizations develop, achieve their aspirations, and contribute to our short- and long-term goals. We provide different types of grants, from project-level grants to general operating support covering the day-to-day costs of operations with an emphasis on maximizing flexible funding. Guided mostly by our program staff, the kind of grants any Open Society program makes depends on its strategy and its vision of how to use its budget most effectively. 

The Open Society Foundation London works in collaboration with other grant-making entities within the network to promote open society values. The Open Society Foundation London’s own grantmaking has focused on facilitating our Economic Justice Program.

Information about the vast majority of Open Society grants awarded since 2016 is available on our website. The database contains as complete a picture as possible of our grant making, although we do omit grants and modify descriptions under some circumstances, including where it is necessary to comply with personal data protection laws, and when disclosure may put at risk the safety or work of a grantee or the Open Society Foundations.

We expect that employees and others acting on our behalf operate in a manner that is fair, respectful, and cooperative with those we serve. The Open Society Foundations maintain ombudspersons to receive complaints about abuse of authority, including by Open Society programs and national or regional foundations, or by members of Open Society boards or staff. The principal responsibilities of ombudspersons involve investigating complaints, facilitating the resolution of disputes, identifying particular abuses or patterns of abuse that warrant attention by the president or Global Board, and making recommendations to the president and/or Global Board that are intended to stop or reduce abuses.

There is a guide and protocol that staff are required to follow when responding to allegations of discrimination, including sexual harassment, within grantee organizations. Our website makes available a policy, setting out our expectations of organizational grantees in handling such allegations within their organizations, as well as providing information about how the Foundations approach these situations.

Staff

A focus in 2021 was to keep staff safe amidst the COVID-19 pandemic. The office was reopened in the year with safety protocols to make the work environment safe. Measures remained in place throughout the year to support the health and mental well-being of staff, such as reduced hours on Fridays.

As part of the change in strategic direction and global restructure taking place across Open Society, a round of voluntary separations for program staff was held. A second round of voluntary separations for operations staff, to be completed in 2022, was started in the year. As workforce planning is completed it is expected there will be involuntary separations in 2022 and a comprehensive support package to help staff transition has been put in place.

Key decisions

Strategic direction

We are rethinking Open Society’s strategic focus and priorities, to better equip us to address the challenges of a vastly changed landscape today. While our mission remains the same—to build vibrant and inclusive societies—we are making difficult choices on how we focus and structure our work for greater impact. This is resulting in continuing to work on certain portfolios while significantly decreasing or winding down work on others.

Open Society over the years has taken on a wide range of issues, and we believe a greater focus in fewer areas will help increase our impact. We plan to coordinate our global work around key areas with significantly larger commitments, a more integrated approach, and a strengthened ability to pivot quickly and take risks on cutting-edge issues. We have started to work with partners in developing short-term, high-impact campaigns and longer-term global initiatives. We also plan to set aside a greater portion of our budget in reserves to respond quickly to emerging circumstances.

Moving forward, we will reinforce George Soros’s original premise that the people closest to the problem are best suited to define the solution. We are shifting greater funding, control, and decision-making to our six regional offices to identify opportunities at the national and regional level. At the global level, we can be more effective if we focus on fewer key priorities at greater scale. We are consolidating a dozen separate thematic programs into a single global program. The work of these seven programmatic centers (six regions and global) will integrate the full range of the Open Society Foundations’ tools—grant-making, advocacy, strategic litigation, and impact investment—in order to harness our full capabilities.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2021.

The principal activity of the company is to promote open society values worldwide.

The results for the year are set out on page 10.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Because the company has secure grant funding arrangements it is not subject to noteworthy liquidity or cash flow risks and does not use financial instruments.

Business relationships are detailed in the Section 172(1) statement included in the Strategic Report.

OSF London will continue to work in partnership with other entities in the Open Society Foundation network “family” of organisations and collaborate on the new strategic direction.

The company purchased 236,535 kWh (2020: 151,936 kWh) of electricity in the year, all of which was “green” sourced and had 0 gram per kWh CO2 emissions. The company did not purchase gas, transport fuel or other energy sources in the year.

Electricity purchased is all used to power the company’s office and, as the electricity has zero carbon emissions the best indicator of usage intensity is electricity kWh per square foot of office space. The office size is 28,798 square feet and thus the indicator is 8.2kWH (2020: 5.3 kWh) per square foot.

The office was built and designed with energy efficiency in mind, such as efficient HVAC and lighting. In addition, for much of 2021 the office was unoccupied as staff worked from home due to the COVID-19 pandemic. There were thus no new initiatives in 2021 to reduce electricity consumption.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the surplus or deficit of the company for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Open Society Foundation London (the 'company') for the year ended 31 December 2021 which comprise the income and expenditure account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its deficit for the year then ended;

•     have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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

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

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our knowledge and experience;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company.

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence where applicable; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

• investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• reading the minutes of meetings of those charged with governance;

• enquiring of management as to actual and potential litigation and claims;

• reviewing relevant correspondence.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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

Use of our report

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

The income and expenditure account has been prepared on the basis that all operations are continuing operations.

Open Society Foundation London is a private company limited by guarantee incorporated in England and Wales. The registered office is 4th Floor Herbal House, 8 Back Hill, London, EC1R SEN.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue recognition

All income is included in the income and expenditure account when the company is legally entitled to the income and the amount can be quantified with reasonable accuracy.

Open Society Foundation London receives income from the Foundation to Promote Open Society (FPOS) and the Fund for Policy Reform Inc. equal to its net expenditure calculated by reference to agreed budgets. Any income received in excess of the net expenditure is therefore treated as deferred income. A debtor is recognised when the relevant income received is less than the amount due for the year.

Grants payable

Grants are recognised within expenditure when they have been approved by the company and this has been communicated to the beneficiary.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to surplus or deficit.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs.

Basic financial liabilities, including creditors are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

The initial costs connected with the leases (including legal and professional fees and stamp duty) are charged to expenses in the year in which it is incurred.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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

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

The total turnover of the company for the year has been derived from grants receivable.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The company is limited by guarantee, not having a share capital and consequently the liability of members is limited, subject to an undertaking by each member to contribute to the net assets or liabilities of the company on winding up such amounts as may be required not exceeding £1.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Key Management Personnel

Salaries and other short term employee benefits for key management personnel totaled £347,798 (2020: £468,082).

Foundation to Promote Open Society and Fund for Policy Reform, Inc. - Common control

During the year the company received grants of £37,631,088 (2020: £33,543,652) from the above entities. At the year end there was accrued income of £2,396,962 (2020: £894,311) in respect of Fund for Policy Reform Inc. and deferred income of £4,195,088 (2020: £1,488,665) from Foundation to Promote Open Society.

The company's immediate parent is Open Society Institute, incorporated in the USA. The address of its registered office is 224 West 57th Street, New York, NY 10019, United States.