Financial strategies and plans

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Financial strategies and plans

• An example of Caritas Switzerland
• Hans Krummenacher-Wüest

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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.

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Particularities

• Financial strategies and plans (example of
  Caritas Switzerland)

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Particularities (1/4) financial mechanism
Relief Organization
? Zielkonflikte
Free funds
Ear-marked funds
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Particularities (2/4) earmarking and scarcity ?
Activity fields portfolio matrix
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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
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Particularities (4/4) administrative overheads
CaCH im 2005 6.0 2006 6.5
Quelle ZEWO, 11.2005
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Particularities summary (1/2)

1. Funding does not come via the physical
   beneficiaries.
2. 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.

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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.

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SUGGESTED SOLUTIONS

• Financial strategies and plans (example of
  Caritas Switzerland)

• Couple strategy and financial planning
• Measure target achievement and deviations
  discuss remedial action
• Establish profit centres (cost centres)
• Key data

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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

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Caritas Switzerlands planning and financial
controlling process
At least every 5 years
Annually
Medium-term financial planning
Quelle Folie von Jürg Krummenacher, 2008
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Medium-term financial planning (budget plus 3
years)
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Long-term planning (approximate)
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Long-term planning target for a single
organisational unit
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Deviation analysis
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SUGGESTED SOLUTIONS

• Financial strategies and plans (example of
  Caritas Switzerland)

• Couple strategy and financial planning
• Measure target achievement and deviations
  discuss remedial action
• Establish profit centres (cost centres)
• Key data

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Suggested solutions(II/III)

• Establish profit/cost centres ( comparing
  receipts and outgoings per field of activity)
• Establish fund accounting

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Each field of activity has a different funding
mix
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so planning for each business area should also
be separate
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Planning dates targets for organizational unit
activities abroad
Fund accounting
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Funds work baskets
Balan- ce sheet 1.1.
Balan- ce sheet 31.12.
Profit and loss account(periode)
Income/ earnings
cost/ expense
Point in time
Point in time
t (timeline)
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Mobilisation of earmarked funds

• Corporate accounting with
• profit centre accounting.
• Funds mobilised only if for an earmarked purpose.

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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)

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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.
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SUGGESTED SOLUTIONS

• Financial strategies and plans (example of
  Caritas Switzerland)

• Couple strategy and financial planning
• Measure target achievement and deviations
  discuss remedial action
• Establish profit centres (cost centres)
• Key data

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Suggested solutions(III/III)

• Set targets, and
• clarify by using key data.

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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)

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(No Transcript)
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Donations trend 2001 - 2011
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Structural costs trend international cooperation
activities 1990 2007 (percentages)
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Thank you for your attention!