Financial strategies and plans

1. Financial strategies and plans An example of Caritas Switzerland Hans Krummenacher-Wüest

2. Topic areas • What are the particular issues and financial demands related to Caritas Switzerland?  Particularities • What are the responses and solutions to these particularities?  Suggested solutions • Your questions, suggestions; discussion.

3. Financial strategies and plans (example of Caritas Switzerland) Particularities

4. Benefit of recipient Primary Task I (Optik HW) Finan-cier Primary Task II (Optik Fi) Particularities (1/4):financial mechanism Relief Organization Zielkonflikte Free funds Ear-markedfunds

5. Particularities (2/4): earmarking and scarcity  Activity fields portfolio matrix

6. Particularities (3/4): receipts and outgoings are out of sync What typically happens when there is a disaster CHF Income Expenses 31.12.05 31.12.06 31.12.07 Zeit

7. Particularities (4/4): administrative overheads CaCH im 2005: 6.0 % 2006: 6.5 % Quelle: ZEWO, 11.2005

8. Particularities: summary (1/2) • Funding does not come via the physical beneficiaries. • Funds are earmarked. It is not possible to fund development of new business ventures (stars) using profitable ones (cash cows) – assuming they exist. Cross-subsidy only possible using spare funds, of which there is a scarcity.

9. Particularities: summary (2/2) • Fund flows (receipts and outgoings) are completely out of sync time-wise – especially where donations are concerned. • Not only is the efficiency of the service provision of interest, but also the nature of the overheads – especially administrative.

10. Financial strategies and plans (example of Caritas Switzerland) SUGGESTED SOLUTIONS: • Couple strategy and financial planning • Measure target achievement and deviations; discuss remedial action • Establish profit centres (cost centres) • Key data

11. Suggested solutions(I/III) Plan, do, check, act • Split strategy into separate activities and allocate price tags (long-term planning and budgeting) • Measure target achievement • Analyse and interpret deviations; discuss • Take remedial action

12. Contepts Activities planning Mission statement/ Constitution Planning of the year Detailed planning Workforce planning Strategy Budget Regulations Management- Review Midterm- Review Workforce situation Financia statement Key figures Caritas Switzerland’s planning and financial controlling process At least every 5 years Annually Medium-term financial planning Quelle: Folie von Jürg Krummenacher, 2008

13. Medium-term financial planning (budget plus 3 years)

14. Long-term planning (approximate)

15. Long-term planning = target for a single organisational unit

16. Deviation analysis

17. Financial strategies and plans (example of Caritas Switzerland) SUGGESTED SOLUTIONS: • Couple strategy and financial planning • Measure target achievement and deviations; discuss remedial action • Establish profit centres (cost centres) • Key data

18. Suggested solutions(II/III) • Establish profit/cost centres (= comparing receipts and outgoings per field of activity) • Establish fund accounting

19. Each field of activity has a different funding mix…

20. Caritas Switzerland head office: organisation chart Director* Jürg Krummenacher Staff Function Caritas Net Sonja Kaufmann *Executive Management Board and Director’s Office Paul Amstad Ann-Katrin Wieser Operations: Fairtrade Clothing Centre Conceptual Studies* Carlo Knöpfel Communi-cation* Odilo Noti International Cooperation* Norbert Kieliger Personnel and Quality Management* Albert Schnyder Finance & Administration* Hans Krummenacher Social Services and Migration Switzerland* Barbara Walther - Controlling - Data Processing - Accounting - Technical Services - Secretariat • Service EmergeAid • in Switzerland • Social engagement • Integration and social • projects • Legal advice service • Fribourg • Central Switzerland • - Secretariat - Social policy - Migration policy - Development policy • - Africa • Asia / Middle East / • North Africa • - Europe / CIS • Latin America • - Emergency Aid • - Services • - Secretariat • - Information • Fundraising and Marketing • Service Education • Service Communication • Caritas Net • - Secretariat • - Staff Services • - Staff Development • Salary Office and • Staff Controlling • Service Evaluation and • Quality Management • - Secretariat August 2007 … so planning for each business area should also be separate

21. Planning dates = targets for organizational unit “activities abroad” Fund accounting

22. Funds = “work baskets” Balan- ce sheet 1.1. Profit and loss account(periode) Balan- ce sheet 31.12. Income/ earnings cost/ expense Point in time Point in time t (timeline)

23. Mobilisation of earmarked funds • Corporate accounting with • profit centre accounting. • Funds mobilised only if for an earmarked purpose.

24. Fund accounting • Funding pots – to be administered temporarily on a trust basis … • … before the funds can be mobilised for an earmarked purpose (Funding Regulations 1.1.2005)

25. Mobilisation of earmarked funds Partial statement: IZA: + 13.9 Mio. SAM - 0.2 Mio. Caritasgeneral - 1.5 Mio. Small business - 0.2 Mio. Total + 12.1 Mio.

26. Financial strategies and plans (example of Caritas Switzerland) SUGGESTED SOLUTIONS: • Couple strategy and financial planning • Measure target achievement and deviations; discuss remedial action • Establish profit centres (cost centres) • Key data

27. Suggested solutions(III/III) • Set targets, and … • … clarify by using key data.

28. Targets and key data(related to “efficient service provision”) • Relations between turnover and structural costs: • Dynamic consideration: • Project supervision max 10% • Administrative overheads (inc. fundraising) max 8% • Static consideration: • Target turnover: CHF 100 million (min CHF 85 million) • Donation target: CHF 32 million (until 2011) • We lead in terms of externally chargeable administrative overheads (max 8%) and in comparison to sector (in the top 3)

30. Donations trend 2001 - 2011

31. Structural costs trend: international cooperation activities 1990 – 2007 (percentages)

32. Thank you for your attention!