P.O. Box 165 P.O. Box 2198Komga, Eastern Cape 4950 Litchfield Park, AZ 85340 South Africa United StatesPh.043.831.1208 Ph.602.920.9958

2010 Annual Report

Board of Directors for the 2010 and 2011 Term

Bob Solis, President, Litchfield Park, AZTed Freese, Treasurer, Minneapolis, MN

Mark Peterson, Secretary, Scottsdale, AZSallie Solis, Litchfield Park, AZ

Dave Horan, Minneapolis, MNJeff Towery, Boise, ID

Dave Nelson, Sarasota, FLTim Chervenak, Spokane, WA

Ann Parsons, Seattle, WA

Key Staff

Ms. Rita Montgomery, Executive Director

Mission Statement

To provide a loving residential environment that serves the emotional, physical and developmental needs of orphaned, abandoned and disadvantaged children in the Eastern Cape of South Africa.

Our Core Values

• We create a safe, welcoming, home-like environment for children• We instill feelings of self-worth and values in a spirit of compassion• We respect the rights of children• We focus on the best interests of each child• We treat all people with respect• We maintain integrity by operating honestly and ethically in everything we do• We always believe that we can make a difference• We offer hope to the children and families we serve

Our Diversity Statement

Open Arms Home for Children is committed to valuing the uniqueness of all peoples. The Home works to provide a residential and work environment where the lives and feelings of everyone are appreci-ated and valued. We call this diversity. It means that we value the presence of people of various strengths and backgrounds including but not limited to economic status, ethnicity, gender, physical abilities, political beliefs, racial heritage, religious conviction and social class.

Because of this belief in action, our commitment is to provide a residential and work environment in which children and adults can realize their full potential. Without this realization, Open Arms Home for Children cannot be successful. Our mission is to be a shining example of inclusion and diversity to the community in which we are privileged to operate.

President’s Report

In its fourth year of operation, Open Arms Home for Children continues to a place of great hope. We ended 2010 with 40 children in our care, a 33 percent growth over last year. While we feel good about this growth, it is the day-to-day love and service that we provide that matters most – both to our children and our staff.

The year 2010 got off to a great start with the dedication of our four new cottages in January. More than 250 people attended the big celebration, including 19 visitors from the United States. It was a great day to celebrate! Later in the year, ten boys moved into the green cottage, becoming the first beneficiaries of our extended campus.

In addition to our four new cottages being ready for children, we had a number of other achievements:

Capital Improvements:

• The erection of an 8-foot high electrified fence around our property• The purchase of a new 14 passenger van• The development of a new soccer field for our kids• The construction and use of a private play therapy room

Fundraising:

• Raised a record total for the year, including more than $300,000 for a new kitchen and dining facility

• Grew our donor base by more than 30%• Held successful fundraising events in Seattle, Milwaukee and Phoenix

Staff and Volunteers:

• Hired a social worker on site to provide for expert case management• Hosted more than 10 volunteers throughout the year• Grew staff to 26 people• Hired 2 graduating seniors from U. of Notre Dame for year-long placements

We remain extremely grateful for the remarkable support of our donors – you make our progresspossible. We try our very best to be the best possible stewards of your gifts and to maximize the impact your gifts have on the lives of our children. We look forward to a brand new year, full of possibility and hope for our current children and those who will come to our doors in the year ahead.

Bob Solis President, Open Arms Home for Children

Overview

Open Arms Home for Children is a residential facility dedicated to serving the needs of childrenorphaned by the AIDS pandemic in the Eastern Cape of South Africa. The Home is a licensed Section 21 company in South Africa and has non-profit status in both South Africa and the United States.

Open Arms was founded by Bob and Sallie Solis of Phoenix, Arizona. Following their lifelong dream to open a home for children in need, Bob and Sallie committed their life savings in August of 2005 topurchase a 70-acre hilltop property in Komga in the Eastern Cape Province. The Home currentlyfeatures six cottages and a four-bedroom home.

The goal of Open Arms Home for Children is to raise each child in a family environment with seven to eight “siblings” under the nurturing care of a housemother. We aim to provide a loving home where children can grow and become future leaders in their communities.

The Need

The need for Open Arms Home for Children is supported by the following statistics:

• On average, 600 people die from AIDS each day in South Africa• South Africa has one of the highest HIV rates in the world• The HIV prevalence rate among pregnant women is currently estimated at 27% nationally• 250 babies are born HIV positive each day in South Africa

In wake of these statistics, there will be thousands of orphaned children in the years to come in ourservice area. The need is there, and unfortunately, grows every day.

Program Report

Open Arms Home for Children is serving a growing and vital need in the Eastern Cape of South Africa. Currently, the five children’s homes in neighboring East London are at capacity. As a result, thedevelopment of Open Arms Home has met a vital need in the community in which we operate.

In our four-year history, Open Arms served the following number of children:

Open Arms Home for Children continues to address four key areas that foster our daily service to children in need:

1. Growing to Serve More Children

There is a great need for homes for orphaned children in South Africa. While our focus is to provide the best quality home-environmentpossible, we realize that it is important to reach more children in need each year. This year, the construction of our new kitchen and dining facility will allow us to grow to 70 children served by 2013. We currently have beds for 70 children, but can only accommodate 40 because of our lack of kitchen and dining facility. Our ambitious building projects in 2011 will allow us to meet our goals for growth in the next few years.

2. Building Campus Infrastructure

The ability of Open Arms Home for Children to expand services to children in need is dependent on our ability to grow and develop our physical infrastructure. To that end, plans are in place to make thefollowing physical improvements to the Home in 2011:

• Build a new 5,000 square foot mess hall that will have an institutional kitchen and large dining area. The facility will also have ample room for dance and karate lessons and other group activities. Upon completion, we will be able to feed 70 children and 15 staff daily, serving more than 250 meals daily.

• Build a new storage building that will house our maintenance equipment and our bicycles. • Build a new volunteer accommodation with 5 apartments and a common area. This will allow for a

steady flow of volunteers once our cottages are full of children. We are fully committed to achieving these goals in 2011.

3. Organizational Leadership

With the growth of our ministry, we are in need of more full-time help for Rita Montgomery, our verycapable Executive Director. To that end, we will be hiring three full-time employees who recently graduated from college to help spearhead our on-site activities, including coordination of volunteers and our ongoing educational efforts.

4. Resource Development

Open Arms is wholly dependent on the generosity of individuals, foundations, churches and corporations for its support. At this time, Open Arms receives no government funding of any kind. We are committed to the continued development of our fundraising operation as it will serve as the lifeblood of our future sustainability.

As a result of these efforts, Open Arms Home for Children raised $692,000 or 4.7 million rand in 2010. These funds carried the operating and capital expenditures of the Home throughout the year and left us with a fund balance of $150,000 at the end of 2010. This represents about six months of operating expenses on hand at the end of the calendar year.

Active Donor GrowthDonors in 2010: 864

Sources of Funding2010 Total: $695,181

Individual Donors: 75% Family Foundations: 24% Corporations: 1%

Total Operating Expenses

• Salaries and benefits: $173,059.83• Supplies/food: 43,030.05• Capital improvements (building/vehicles): 113,825.74• Clothing/shoes: 3,350.98• Petrol: 11,234.14• School fees: 11,408.02• Health care: 1,379.38• Utilities/phone: 13,609.78• Travel: 19,248.92• Recreation/entertainment: 335.31• Fundraising expenses: 25,300.46• Marketing/printing/postage: 14,652.00• General expenses: 4,428.96• Professional services (legal/HR/audit): 5,656.11• Insurance: 10,314.07• Maintenance/repairs: 8,874.93• Rent: 2,307.69

Total expenses: $462,016.40

Outlook for 2011

As we get ready to celebrate our 5th anniversary of service in March, 2011, we are as committed as ever to living out our biblical motto: “Whoever welcomes one child such as this in my name, welcomes Me.” (Mark 9:37). We are excited about our building projects which will help us secure our growth in the years ahead. The work we do is vitally important to the chlidren we serve and we sincerely thank all those people who make our work possible. We are privileged to share this work with you.