Friends of La Gloria English School

HISTORY AND MISSION

La Gloria English School was founded with the hope of providing English speaking skills to the people of Isla Mujeres, a prospering tourist destination near Cancun, Mexico. The mission of the school is to offer the opportunity to learn English regardless of the ability to pay. Until the school was opened, residents of the island had no reliable, affordable opportunity to learn English and without this language, employment with a living wage was becoming more and more difficult.

In the 5 years the school has been open, we have slowly increased our annual registrations from about 150 in 2004, our first year of operation, to more than 450 students in 2008. We are at capacity now and hope to continue sustaining this number. We offer 8 to 10 classes daily during each term, and teach students from kindergarten through adults, with an emphasis on speaking. There are five 8-week terms scheduled each year.

Publicity about the school has slowly increased over the years, and in 2008 it was featured as a side-bar in the book “Lets Go Mexico 2008”. There are numerous links on the internet leading people to the website if one does a google search for “Isla Mujeres, school”. During high season (Feb –April) many new visitors come to the school with questions and interest in helping or donating supplies. This has been very positive for the school, increasing our visibility and support.

Looking forward, in January of 2009 after hearing many requests from tourists, La Gloria English School began offering drop-in Spanish lessons 3 times a week. They are taught by Juan Torres, a local man who has taught English and Spanish in Mexico City. First reports from students are very positive. Benefits include a small financial donation, and of course increased traffic to the school by potential donors and volunteers.

TWO COUNTRIES, TWO BUDGETS

Friends of La Gloria English School Inc (FOLGES) is the U.S. non-profit started in 2005 to support La Gloria English School AC (LGES) the civil association which is the legal entity for the school in Mexico. They each have their own budgets and until recently, it was impossible to get funds from one to the other.

FOLGES income is received through small donations from individuals, our annual Salsa Fiesta fund-raiser and several small satellite fund-raisers at schools in the U.S., including Colorado, Ohio and Wisconsin. We have yet to receive any government or grant money. When FOLGES was created the IRS stipulated that no monies be sent to LGES to help with ongoing expenses for the school unless we could provide specific receipts for every dollar sent to the school. Therefore, FOLGES has paid (in U.S. dollars) the teacher’s living stipends, the housing costs for the teachers and the school, and capital expenditures like the computer for the office.

LGES in Mexico raises money in several ways, primarily from tuition payments from our students, donations from tourists and small clothing sales at the school. In 2008 we had our first raffle fundraiser and will continue with this, as it was very successful. We also received for the first time about $1,100 in grants from PEACE-Isla Mujeres, a new local organization dedicated to various causes on Isla Mujeres.

The preferred method of payment for scholarships at LGES continues to be to bring the pesos or dollars to the school. However if an individual wants to sponsor a student at the school and cannot bring the money personally, they can now specify the student on the check sent to FOLGES. That amount is withdrawn in Mexico in pesos and used for the tuition payment. Then a receipt is generated at LGES for that specific amount for that student. This is sufficient documentation for the IRS.

RESULTS

There were 457 registrations for classes in 2008 for potential revenues of $19,870. But LGES actually received a total of $14,582 in registration fees, donations, scholarships and grants. The shortfall was partially made up by the raffle and clothing sales. The budget results for 2008 had a net shortfall of $2,645. LGES started 2009 with a surplus of $816 because of the carryover of $3,376 from 2007.

Below are all the financial details for the year 2008 for both FOLGES and LGES, with explanations where needed.

LA GLORIA ENGLISH SCHOOL AC

DECEMBER 31, 2008

BALANCE SHEET (U.S. dollars)*

Assets

Current Assets

Checking account

Cash on hand

Total Liquid Assets

Total physical Assets

Total Assets Liabilities & Equity

Current year opening Equity

2008 Budget results

Total

Physical Equity

Total current Liabilities & Equity

$ 420

$ 396

$ 816

$2,645

$3,461

$3,376

$2,560

$ 816

$2,645

$3,461

REVENUE & EXPENSES

OrdinaryRevenue/Expense*1

Course Registrations*2

Donations/scholarships

& Grants*3

Clothing Sales*4

Raffle*5

Revenue Totals

Expenses

Legal Fees

Utilities

Salaries & Benefits*6

Office/School

Maintenance & Supplies

Expenses Total

Net Loss*7

Total

2008

$ 9,315

$ 5,267

$ 824

$ 2,174

$17,580

$ 1,114

$ 2,497

$14,575

$ 1,955

$20,141

$ 2,561

Approved

Budget

2008

$ 8,695

$ 8,435

$ 580

$ 2,174

$19,884

$ 2,609

$ 2,855

$12,319

$ 2,101

$19,884

Approved

Budget

2009

$ 9,783

$ 6,014

$ 870

$ 4,348

$21,015

$ 964

$ 2,536

$15,434

$ 2,080

$21,015

NOTES:

*Conversion rate is 13.8 pesos to the US dollar taken as of 12/31/08.

*1 There is no dollar amount put on the donations of clothing and school supplies regularly brought to the school on Isla Mujeres, but this has been a significant resource for the school. Throughout the year the school has received good used clothing, school and office supplies and occasionally a laptop computer. Supporters of the school have been extremely generous and creative with their donations but it would be very difficult to estimate the dollar value. Many of these items are given out to students in the English classes or donated into the community to people in need. Also, office supplies like printer ink and copy paper have kept our expenses low. All donations are extremely important and help make the school what it is: a center in and resource to the community.

*2 There were 457 registrations for classes in 2008. $9,315 reflects 47% of the total due in registrations if every student paid in full.

*3 The mission of the school is to offer English to every interested student regardless of their ability to pay, and it is through these donations that we are able to do this. The grants received in 2008 at LGES were from PEACE-Isla Mujeres, and totaled $15,000 pesos ($1,087 USD).

This is the first year money was received from the U.S. non-profit FOLGES in the form of scholarships. (Donations to FOLGES specifically earmarked by the donor as a scholarship donation, usually for a particular student, are included in this figure.) Although a bit time consuming to administer, we are now able to assign particular students to receive these scholarships and send the donor the name and sometimes a photo of 'their' student. It has been a very rewarding program for both the donors and the students. Regularly, our students want to know if their donors are on Isla on vacation, and are very excited to meet them and introduce them to their families. This has resulted in significant cross-cultural friendships.

*4 We welcome donations of good used clothing which we sell at a fraction of their value after pulling out particular pieces to donate to known families in need. We have found this to be a very popular event in the community of La Gloria. We often have 50 people waiting out side our doors before the start of a sale, because we have excellent quality clothing at the best prices. We also use this opportunity to publicize the upcoming English classes we will be offering at the school. The money gained is used to offset expenses at the school.

*5 300 Raffle tickets were sold last year for a week's stay at an apartment on Isla. There was no overhead for this event. (Tickets were designed and printed in the LGES office and the apartment was donated.) At the time of the sale, the exchange rate was 10 pesos to the dollar, but to be consistent for this report, all exchange rates reflect the 13.8/1 rate on December 31, 2008.

*6 The school employs 3 part-time office staff each working at least 4 hours a day, to cover the 12-hour day the school is open. The school pays for their public health insurance as well. The director of the school, Margaret Washa, does not receive any salary or compensation for her time and dedication to the school.

*7 This is the first time in 3 years we have operated at a loss, and hopefully we will not repeat it in 2009. We are selling 700 raffle tickets this year, to raise more funds, and are more aggressively looking for scholarships for students. Hopefully PEACE-Isla Mujeres will also be able to grant more to the school.

FRIENDS OF LA GLORIA ENGLISH SCHOOL INC

DECEMBER 31, 2008

BALANCE SHEET

Assets

Current Assets

Checking/Savings

Associated Bank Checkbk

Associated Bank Mny Mkt

CD Feb 7, 2009 1.689%

CD April 24, 2009 1.743%

Total Current Assets

TOTAL ASSETS

Liabilities and Equity

Equity

Current Yr Opening Equity

Current Yr Budget Results

Total Equity

TOTAL LIABILITIES & EQUITY

$ 1,554.34

$30,629.71

$ 5,348.83

$ 5,497.60

$43,030.48

$28,069.55

$14,960.93

$43,030.48

REVENUE & EXPENSES

Ordinary Revenue/Expense

General Donations*

Scholarship Donations*1

Salsa Fiesta

Interest Income

Total Revenue

Expenses

Salsa Fiesta*2

Contract Administrator*3

Executive Director*4

Work Visas & Fees

Office Expenses

Scholarship Expenses*5

Emergency Expenses

Facilities/Teacher Housing*6

Teacher Stipends*7

Total Expenses

Net Excess Revenue

2008

Total

$24,978

$ 3,398

$ 9,110

$ 670

$38,156

$ 425

$ 1,400

$ 0

$ 1,200

$ 570

$ 1,600

$ 600

$ 8,400

$ 9,000

$23,195

$14,961

Approved

2008

Budget

$25,000

$ 0

$ 200

$25,200

$ 900

$ 1,200

$ 0

$ 1,200

$ 300

$ 0

$ 1,200

$ 8,400

$12,000

$25,200

Approved

2009

Budget

$19,400

$ 0

$ 7,500

$ 600

$27,500

$ 500

$ 1,600

$ 0

$ 1,400

$ 600

$ 0

$ 1,200

$ 9,000

$13,200

$27,500

NOTES

* In-kind donations have not been included in the financial statements. They include the design and printing of 2000 brochures promoting the school, the maintenance of the website and countless volunteer hours by generous people who believe in this project. Our U.S. Board of Directors have received no compensation, including their out-of-pocket expenses to attend meetings and give their time. A hard-working copy machine was donated to the school in 2006 and is still serving us. We could not exist and continue this important work without these very generous in-kind donations.

*1 Scholarship donations are specifically indicated as such on the checks sent, and can then be withdrawn in pesos in Mexico to be used for scholarships for students. We must then provide Uncle Sam with receipts in pesos. We don't budget for this, but let the money flow through the non-profit to come to the school. There are bank charges - 3% - that we lose in this transaction.

*2 The overhead for the Salsa Fiesta was less than 5%.

*3 FOLGES was able to pay for some help with data entry and for someone to answer emails from potential volunteers and those bringing donations to the school. It has been extremely helpful to have this assistance, and this payment does not reflect all the hours worked.

*4 The FOLGES Executive Director, Margaret Washa, does not receive any financial compensation for this position.

*5 This reflects the total withdrawn in 2008 for scholarships at the school.

*6 This is rental payment for the building on Isla Mujeres. It covers the annual cost of housing for the teachers and the school. The landlord is responsible for maintenance and upkeep of the school and the apartments for the teachers, including plumbing, electrical and the air conditioning.

*7 The teachers were each paid a living stipend of $500/mo in 2008, in addition to receiving free housing. ($3,000 of this expense unintentionally showed up on the 2007 expenses.)