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

2. Hans Krummenacher, Berlin 8.5.2008 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. 2

3. Hans Krummenacher, Berlin 8.5.2008 Particularities Financial strategies and plans (example of Caritas Switzerland) 3

4. Hans Krummenacher, Berlin 8.5.2008 4 Particularities (1/4): financial mechanism Primary Task I (Optik HW) Primary Task II (Optik Fi) Relief Organization Free funds Ear- marked funds Finan- cier Benefit of recipient  Zielkonflikte

5. Hans Krummenacher, Berlin 8.5.2008 5 Particularities (2/4): earmarking and scarcity  Activity fields portfolio matrix

6. Hans Krummenacher, Berlin 8.5.20086 Particularities (3/4): receipts and outgoings are out of sync Zeit CHF 31.12.0531.12.0631.12.07 Expenses Income What typically happens when there is a disaster

7. Hans Krummenacher, Berlin 8.5.2008 7 Quelle: ZEWO, 11.2005 Particularities (4/4): administrative overheads CaCH im 2005: 6.0 % 2006: 6.5 %

8. Hans Krummenacher, Berlin 8.5.2008 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. 8

9. Hans Krummenacher, Berlin 8.5.2008 Particularities: summary (2/2) 3.Fund flows (receipts and outgoings) are completely out of sync time-wise – especially where donations are concerned. 4.Not only is the efficiency of the service provision of interest, but also the nature of the overheads – especially administrative. 9

10. Hans Krummenacher, Berlin 8.5.2008 SUGGESTED SOLUTIONS: Financial strategies and plans (example of Caritas Switzerland) 10 ► Couple strategy and financial planning ► Measure target achievement and deviations; discuss remedial action ► Establish profit centres (cost centres) ► Key data

11. Hans Krummenacher, Berlin 8.5.2008 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 11

12. Hans Krummenacher, Berlin 8.5.2008 Caritas Switzerland’s planning and financial controlling process Regulations Midterm- Review Management- Review Planning of the year Detailed planning Mission statement/ Constitution Strategy Contepts Activities planning Workforce planning Budget Workforce situation Financia statement Key figures Quelle: Folie von Jürg Krummenacher, 2008 Annually At least every 5 years Medium-term financial planning

13. Hans Krummenacher, Berlin 8.5.2008 Medium-term financial planning (budget plus 3 years) 13

14. Hans Krummenacher, Berlin 8.5.2008 Long-term planning (approximate) 14

15. Hans Krummenacher, Berlin 8.5.2008 Long-term planning = target for a single organisational unit 15

16. Hans Krummenacher, Berlin 8.5.2008 Deviation analysis 16

17. Hans Krummenacher, Berlin 8.5.2008 SUGGESTED SOLUTIONS: Financial strategies and plans (example of Caritas Switzerland) 17 ► Couple strategy and financial planning ► Measure target achievement and deviations; discuss remedial action ► Establish profit centres (cost centres) ► Key data

18. Hans Krummenacher, Berlin 8.5.2008 Suggested solutions(II/III) ► Establish profit/cost centres (= comparing receipts and outgoings per field of activity) ► Establish fund accounting 18

19. Hans Krummenacher, Berlin 8.5.2008 Each field of activity has a different funding mix… 19

20. Hans Krummenacher, Berlin 8.5.2008 … so planning for each business area should also be separate 20 Caritas Switzerland head office: organisation chart August 2007 - Service EmergeAid in Switzerland - Social engagement - Integration and social projects - Legal advice service - Fribourg - Central Switzerland - Secretariat - Controlling - Data Processing - Accounting - Technical Services - Secretariat Director* Jürg Krummenacher Director* Jürg Krummenacher Board and Director’s Office Paul Amstad Ann-Katrin Wieser Board and Director’s Office Paul Amstad Ann-Katrin Wieser Finance & Administration* Hans Krummenacher Finance & Administration* Hans Krummenacher Personnel and Quality Management* Albert Schnyder Personnel and Quality Management* Albert Schnyder Communi- cation* Odilo Noti Communi- cation* Odilo Noti International Cooperation* Norbert Kieliger International Cooperation* Norbert Kieliger Social Services and Migration Switzerland* Barbara Walther Social Services and Migration Switzerland* Barbara Walther Conceptual Studies* Carlo Knöpfel Conceptual Studies* Carlo Knöpfel - 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 - Social policy - Migration policy - Development policy Staff Function Caritas Net Sonja Kaufmann Staff Function Caritas Net Sonja Kaufmann Operations: Fairtrade Clothing Centre Operations: Fairtrade Clothing Centre *Executive Management

21. Hans Krummenacher, Berlin 8.5.2008 Planning dates = targets for organizational unit “activities abroad” 21 Fund accounting

22. Hans Krummenacher, Berlin 8.5.2008 22 Funds = “work baskets” t (timeline) Balan- ce sheet 1.1. Balan- ce sheet 31.12. Income/ earnings cost/ expense Profit and loss account (periode) Point in time

23. Hans Krummenacher, Berlin 8.5.2008 23 Mobilisation of earmarked funds  Corporate accounting with  profit centre accounting.  Funds mobilised only if for an earmarked purpose.

24. Hans Krummenacher, Berlin 8.5.2008 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) 24

25. Hans Krummenacher, Berlin 8.5.2008 25 Mobilisation of earmarked funds IZA: + 13.9 Mio. SAM- 0.2 Mio. Small business- 0.2 Mio. Caritas general - 1.5 Mio. Total+ 12.1 Mio. Partial statement:

26. Hans Krummenacher, Berlin 8.5.2008 SUGGESTED SOLUTIONS: Financial strategies and plans (example of Caritas Switzerland) 26 ► Couple strategy and financial planning ► Measure target achievement and deviations; discuss remedial action ► Establish profit centres (cost centres) ► Key data

27. Hans Krummenacher, Berlin 8.5.2008 Suggested solutions(III/III) ► Set targets, and … ► … clarify by using key data. 27

28. Hans Krummenacher, Berlin 8.5.2008 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) 28

29. Hans Krummenacher, Berlin 8.5.2008

30. Donations trend 2001 - 2011 30

31. Hans Krummenacher, Berlin 8.5.2008 Structural costs trend: international cooperation activities 1990 – 2007 (percentages) 31

32. Hans Krummenacher, Berlin 8.5.2008 32 Thank you for your attention!