Presentation Outline

CACCI CHAMBER OPERATIONS COURSEAugust 10, 2009, Taipei, TaiwanINCOME GENERATING ACTIVITIES OF CHAMBERSBy: Geronimo D. Sta. Ana

Presentation Outline • Need for Income Generating Activities • Major Sources of Funds for Chambers • Income from Operations – Usual Sources IV. Income Generating Activities – Some Notes V. Fundraising – Some Basic Guidelines VI. Process/Steps in Project Planning • Sample List of Funding Agencies • Cebu CCI Income Profile IX. PCCI Income Profile

I. Need for Income Generating ActivitiesAn acceptable definition of an “income generating activity” would be an activity performed by, or under the auspices of a chamber, of which the chamber’s costs are not entirely borne by its general budget.

A chamber’s primary source of income is membership fees, whether membership is voluntary or mandatory. Most of the time, however, the chamber cannot operate effectively and give the necessary services to members when it relies entirely on the membership fees – especially when the chamber is relatively small. So there is a need to engage in “income generating activity.”

No positive or negative connotations should be given to the term “income generating activity” in comparison with the term “services performed free of charge.” All the activities and services undertaken by a chamber for the benefit of its members and the community have positive effects on the chamber’s strength and reputation.

II. Major Sources of Funds for Chambers II-A. Income from Operations- funds generated from regular operations, and through extra services to members/non- members II-B. Grants, financial and other assistance - funds from external sources obtained thru fundraising activities.

III. Income from Operations -Usual Sources III-A. Membership fees and dues III-B. Trainings and seminars III-C. Fairs and exhibits III-D. Events Management III-E. Conferences III-F. Publications III-G. Export documentation fees (Chamber seal) III-H. Import processing fees III-I. Trade Missions – outgoing & incoming III-J. Some Chamber Services that may be a source of income III-K. Other services of Chambers III-L. Securitization

III-A. Membership fees and dues • Fee structure • Fixed fees • Variable fee based on: - Number of employees - Assets - Income - Sales - Total salaries

III-B. Trainings & seminars • Enterprise management • Association management • Technical courses and examinations • Leadership training

III-C. Fairs & Exhibits • CCI can assist in booking space, arranging group travel, running a common information desk, provide secretarial, translation and interpretation service • Funding from government or aid agency if any, can be disbursed by Chamber • Administrative charge can be levied on participants or donors

III-F. Publications • Trade directories • Handbooks • Packaging for export • Export documentation • Country surveys • Accounting for SMEs • How to start and manage your own business

Special Publications • Commemorating occasions • Visits • Exhibitions • Economic Bulletins

III-G. Export Documentation Fees • Certificate of Origin – is a document which identifies the origin of goods being exported. It is required by customs as one of the key bases for applying tariff rates. Most chambers of commerce and some trade associations have been authorized by their Customs agencies to certify non-preferential, and in some cases, preferential certificates of origin. Thus, a chamber’s role in the issuance and attestation of Certificates of Origin is both unique and vital in facilitating international trade.

III-H. Import Processing Fees • Processing and filing of importation of members.

III-J. Some Chamber Services that may be a Source of Income 1. Office services • Fax service • E-mail service • Internet use • Photocopies • Correspondence, minute-taking for meetings • Translations

2. Rental of Premises • Entrepreneurs’ discussions • Seminars • Conferences • Panel discussions • Company anniversaries, especially those of member enterprises • Presentation of awards • Other solemn occasions • Small exhibitions, particularly by the handicrafts sector

3. Rental of equipment • LCD • Computers • Providing basic business information • Establishing a business information center • Trade and business opportunities • Information on trade services • Social, political and economic information of the country • Basic business laws

Providing investment information • Negative lists that indicate product areas or industrial sectors where foreign investors are prohibited from investing in; • Wages and fringe benefits by geographical area, occupation and industry • Labor availability by major occupation and geographical area • Rental of office space and industrial land • Cost and availability of utilities (water, gas, electricity)

Investment information (continued) • Telecommunications cost • Other costs of doing business in the country • Financial and banking system • Taxation • Tax incentives for investors • Product and technical standards • List of national sources of information

6. Providing specialized business information • Special or customized industry reports • Information on foreign trade regulations • Laws relating to foreign investments and business co-operation

7. Providing Data on Business Opportunities • List of potential local and foreign buyers • Tender information from local or national government, international organizations and foreign governments • Guide or reference books on major trade exhibitions held within and outside the country • List of foreign missions visiting the country

Providing data on business opportunities (continued) • Business/trade inquiries from abroad • Publications of other trade associations • Foreign trade association publications (specially directories) • Directory of local and foreign suppliers • Company newsletters • Annual reports of companies

III-K. Other Services of Chamber • Internet-based services • E-commerce • Website development • Research • Community service andenvironmental protection program • Outreach programs • Educational programs • Medical assistance • Support to disaster relief operations

IV. Income Generating Activities – Some Notes IV-A. Introduction of new services IV-B. Services offered for a fee IV-C. Range and choice of services IV-D. Larger and more qualified staff IV-E. Tougher competition in the recruitment of members IV-F. An active and larger chamber attracts new members IV-G. Spreading risks, continuity and planning IV-H. Greater recognition IV-I. Cooperation agreements IV-J. Consultants IV-K. Inter-chamber cooperation

IV-A. Introduction of new services A chamber should not offer to its members an income-generating activity that it had previously provided free of charge. Therefore a chamber of commerce that seeks new means of obtaining revenue should look for “new” activities, while upholding the standard of services offered free. However, where non-members are concerned, some easily defined membership services may be “packaged” and offered as a fee-based service.

IV-B. Services offered for a fee - must be of an indisputable quality, as the chamber’s reputation will stand or fall by it. It is therefore of prime importance to choose competent staff, advisers or consultants. As a rule, it is better not to offer fee-based services than to offer services of poor quality.

IV-C. The range and choice of services offeredshould be determined by demand. A chamber must have special reasons to offer services already provided by other organizations or individuals. These reasons may include demand from members or the ability of the chamber of commerce to offer services of a higher quality.

IV-D Larger and more qualified staff • Staff experienced in the diverse applications of business law and regulations • Employ several specialists

IV-E Tougher competition in the recruitment of members • Companies prefer organizations offering the best cost-benefit ratio. • Membership in two or more organizations is indeed common, but this may be different during recessions, or when the company experiences a downturn.

IV-F An active and larger chamber attracts new members • Companies will be more attracted to join a highly (and therefore better known) chamber, than one that is less known. • Companies will be more inclined to join one that enrolls increasing numbers of local companies as members.

IV-G Spreading risks, continuity and planning • Changes in official regulations sand lean years may put the chamber into financial difficulties. In times of recession, governments may reduce the financial support given to a chamber established under public law. • Income-generating activities broaden a chamber’s financial base and enable it to manage difficult periods and adjust to new conditions.

IV-H Greater recognition • Income-generating activities may stimulate publicity and recognition of the chamber • The more active the chamber, the more recognition it will receive

IV-I Cooperation agreements • A chamber from one geographic location may have an understanding with another chamber in a different location, so that when members require assistance and guidance on local or regional issues, the two chambers, under an agreement, can provide assistance to each other.

IV-J Consultants • Chambers may hire consultants on specialized fields for specific projects

IV-K Inter-chamber cooperation • With increasing use of electronic networks, it is possible for a chamber in one region to cooperate with a chamber in another on the basis of an agreement providing for a two-way flow of assistance to members of their respective chambers, for their mutual benefit and in exchange for a fee for services rendered. • Chambers often cooperate on a provincial or national level, forming federations, associations or councils, thus enabling them to avail of the services of each other’s specialists.

IV-L Marketing of services • Chambers of commerce must make their services known to the public by circular letters, through their journals, etc.

V- Fundraising Some Basic Guidelines A. Ensure that the Board is strongly involved in the planning and implementation of fundraising efforts; B. Develop fundraising goals – resourcesneeded to reach the strategic planning; C. Identify a variety of fundraising sources - for each of the goals (through networking, internet research, etc.) and formulate strategies for each.

FundraisingSome basic guidelines (continued) D. Ensure that roles and responsibilitiesare clearly indicated in the plan so that there will be no duplication of requests to the same funders/sponsors; E. Determine the proper timingfor submitting proposals/requests for sponsorship; eg., during the last quarter of the year when organizations/ companies are preparing their budgets; F. Engage a proposal writerif skills are not available within the organization.

VI. Process/steps in project planning A. Statement of your project or need - This is a brief statement of the project, needs or concerns that your organization recognizes and is prepared to undertake/address. B. Objectives - The objectives must be measurable and specific, and it must relate to the need. When you’ve defined and substantiated the need, describe how you expect to attain them.

Process/steps in project planning (continued) • Methodology (Procedure) - Describe how you will accomplish your objectives. This is where you lay out what you will actually do. For instance, part of your procedure may be to hire a project coordinator. • Expected results – Developmental results that are immediate, visible, concrete and tangible consequences of completed project activities. • Budget - You need to prepare a budget, and it is best done early in the process.

F. Projects – Some notes 1 Projects may be funded by charitable institutions, foundations, local and international grant agencies and corporate donors. 2 Donors spend a great deal of time and effort to raise funds, you should always keep in mind that they find it quite difficult to give money away without justifiable reason. 3 You need to follow guidelines provided by your potential donor agency. 4 It takes time, patience and persistence to succeed. It may take 6 months to 1 year before your proposal is approved. In between this time your potential donor may be asking so many questions.

G. Typical Format of a Technical Proposal I. Project title • Proponent • Background and development context IV. Activities and implementation schedules V. Project team VI. Monitoring and evaluation VII. Performance milestones – reporting schedule

H. Tips on how to develop a Project • Innovate • Be flexible • Ability to break the project to suit donors’ objectives (preferred areas of support) • Ability to break the project into sub- projects to suit donors’ funding limits.

VII. Sample List of Funding Agencies • Australia - AusAid • Austria - Directorate General for Development Cooperation • Britain - Department for International Development • Canada - Canadian International Development Agency (CIDA) • Finland - Finnish International Development Agency (FINNIDA) • France - Ministere de la Cooperation • Germany - Deutche Gessellschaft fur Technische Zusammenarbelt (GTZ) • ZDH - Zentral Verband des DeutschenHandwerks • Ireland - Development Cooperation Division • Italy - Department of Development Cooperation • Japan - Japan External Trade Organization (JETRO), Japan International Cooperation Agency (JICA) • Netherlands- Directorate General for International Cooperation (DGIS) • Spain - Spanish Agency International Cooperation (AEC) • Sweden - Swedish International Development Agency (SIDA)

CCCI Grants from Funding Agencies: 2005-2008 Agency/OrganizationProject Amount German Technical Cooperation (GTZ) SMEDSEP Web Portal Dev& Maint. 288,000.00 SMEDSEP EDS Trainings & For a 300,000.00 Ecozone Study Proj-Int’l.Consultant SMEDSEP 1,800,000.00 Ecozone Study Proj-Local ConsultingGrp Decentralization Program 1,200,000.00 3,588,000.00 ========= German Dev Service(DED) Quality Management Consultant 6,480,000.00 Doc.Control Custodian Subsidy 150,000.00 Equipment 300,000.00 Members’ Training Subsidy 1,000,000.00 Staff Training Subsidy 300,000.00 8,230,000.00 ========== CIDA-Pearl 2 996,000.00 Total Grants from Funding Agencies 11,818,000.00 ===========

Cebu CCCI Sources of Revenue 2003-2008 • Membership Dues 35% • Export documentation Fees 18% • CBM 17% • Rental Income 12% • Interest Income 4% • Services to Members 3% • Donations 2% • Trainings & Seminars 1% • Business Studies/ Trade Missions 1% • Consultancy Fees 1% • Desk Calendar Income 1% • Publications, Business Directory 1% • Others 4% • Total 100%

PCCI Sources of Revenue 2004 - 2008 2004 2005 2006 2007 2008 Phil. Business Conference 18% 21% 23% 28% 39% Membership Fees 17% 18% 16% 17% 20% Import Processing Fees 46% 42% 37% 35% 17% Certificate of Origin 9% 9% 8% 10% 10% Others 10% 10% 16% 10% 14%

PCCI Sources of Revenue 2004-2008

PCCI Sources of Revenue 2008 • Phillippine Business Conference 39% • Membership Fee 20% • Import Processing Fee 17% • Cerificate of Origin 10% • Others 14% • Total 100%

Presentation Outline