Financial strategies and

plans
An example of Caritas Switzerland

Hans Krummenacher-West

1
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.

Hans Krummenacher, Berlin 8.5.2008 2

Financial strategies and plans (example of Caritas Switzerland)

Particularities

Hans Krummenacher, Berlin 8.5.2008 3

 Particularities (1/4): financial mechanism

Relief Benefit of
Primary Task I recipient
Organization
Finan- (Optik HW)
cier
Zielkonflikte
Free Ear-
funds marked
Primary Task II
funds
(Optik Fi)

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

5
Hans Krummenacher, Berlin 8.5.2008
 Particularities (3/4): receipts and outgoings are
out of sync
What typically happens
CHF when there is a disaster
Income

Expenses

31.12.05 31.12.06 31.12.07

Zeit
Hans Krummenacher, Berlin 8.5.2008 6
Particularities (4/4): administrative overheads

CaCH im
2005: 6.0 %
2006: 6.5 %

7
Hans Krummenacher, Berlin 8.5.2008 Quelle: ZEWO, 11.2005
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.

Hans Krummenacher, Berlin 8.5.2008 8

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.

Hans Krummenacher, Berlin 8.5.2008 9

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
Hans Krummenacher, Berlin 8.5.2008 10
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

Hans Krummenacher, Berlin 8.5.2008 11

 Caritas Switzerlands planning and
financial controlling process
Contepts Activities planning

Mission statement/ Planning Workforce planning Detailed

Strategy
Constitution of the year planning
Regulations Budget

Medium-term
financial planning
Management- Midterm-
At least Review Review

every 5 Workforce situation

years Financia statement Annually
Key figures
Quelle: Folie von Jrg Krummenacher, 2008
Hans Krummenacher, Berlin 8.5.2008
Medium-term financial planning
(budget plus 3 years)

Hans Krummenacher, Berlin 8.5.2008 13

Long-term planning (approximate)

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Long-term planning = target for a
single organisational unit

Hans Krummenacher, Berlin 8.5.2008 15

A
Deviation analysis
Jah re sre c h n u n g e n IZA
Betrge in CHF 1,000,000.00 Bu02 IST 02 Bu03 Plan04 Plan05 Plan06
Total Spenden/Legate/Opfer 8.4 9.4 1.0 11.9 11.9 11.9 11.9
Beitrge: - Dritter 31.2 26.6 -4.7 19.4 19.4 19.4 19.4
- Staat 13.1 9.5 -3.6 9.7 9.7 9.7 9.7
Total Beitrge 44.4 36.1 -8.3 29.0 29.0 29.0 29.0
brige Beitrge - - - -
Dienstleistungen - 0.0 0.0 0.0 0.0 0.0 0.0
Verkaufserlse + Ertr. Aus Projekten (MIG)
- 0.1 0.1 - - - -
Vermgenserfolg (ne u ink l. Marchz.!) - - - - - - -
Aufwertungen/Buchgewinne - - -
Abzug MWSt - -0.0 -0.0 -0.0 -0.0 -0.0 -0.0
Total Verschiedene Ertrge - 0.1 0.1 0.0 0.0 0.0 0.0
Total Ertrag 52.7 45.5 -7.2 40.9 40.9 40.9 40.9
Direkter Projektaufwand -53.7 -44.6 9.1 -42.4 -41.0 -39.0 -37.0
Personalaufwand (I) -2.2 -2.3 -0.0 -1.8 -1.8 -1.8 -1.8
Werbung (I) - - - - -
Restlicher Aufwand (I) -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0
Direkte Projektkosten -56.0 -46.9 9.1 -44.2 -42.8 -40.8 -38.8
Personalaufwand (II) -4.3 -4.2 0.1 -3.86 -3.81 -3.76 -3.76
Restlicher Aufwand (II) -0.5 -0.5 -0.0 -0.4 -0.4 -0.4 -0.4
Indirekte Projektkosten -4.8 -4.7 0.0 -4.3 -4.2 -4.2 -4.2
in % (frher Projektb egleitkosten) 8.5% 10.1% 9.7% 9.9% 10.3% 10.8%
Verrechenbare Kosten - - - - - - -
Nicht verrechenbare Kosten - - - - - - -
Total Aufwand Betriebe - - - - - -
Investitionen/Rckstellungen - - - - - - -
Hans
Zuk Krummenacher, Berlin
nfti ge di ver. Ei8.5.2008
nspar./M ehrertr. 16

Total Aufwand -60.8 -51.6 9.1 -48.5 -47.0 -45.0 -43.0

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
Hans Krummenacher, Berlin 8.5.2008 17
Suggested solutions(II/III)

Establish profit/cost centres (= comparing

receipts and outgoings per field of activity)

Establish fund accounting

Hans Krummenacher, Berlin 8.5.2008 18

Each field of activity has a
different funding mix

Hans Krummenacher, Berlin 8.5.2008 19

 so planning for each business
area should also be separate
Caritas Switzerland head office: organisation chart
Director*
Jrg
Jrg Krummenacher
Krummenacher

*Executive Staff Function

Management
Caritas Net
Board and
Sonja
Sonja Kaufmann
Kaufmann
Directors Office
Paul Amstad
Ann-Katrin Wieser Operations:
Fairtrade
Fairtrade
Clothing
Clothing Centre

Conceptual International Social Services Communi- Personnel Finance &

Studies* Cooperation* and Migration cation* and Quality Administration*
Switzerland* Management*
Carlo
Carlo Knpfel
Knpfel Norbert
Norbert Kieliger
Kieliger Odilo
Odilo Noti
Noti Hans
Hans Krummenacher
Krummenacher
Barbara
Barbara Walther
Walther Albert
Albert Schnyder
- Social policy - Africa - Service EmergeAid - Information - Staff Services - Controlling
- Migration policy - Asia / Middle East / in Switzerland - Fundraising and - Staff Development - Data Processing
- Development North Africa - Social engagement Marketing - Salary Office and - Accounting
policy - Europe / CIS - Integration and social - Service Education Staff Controlling - Technical Services
- Latin America projects - Service - Service Evaluation and - Secretariat
- Emergency Aid - Legal advice service Communication Quality Management
Hans Krummenacher, Berlin 8.5.2008 - Services - Fribourg Caritas Net - Secretariat August
20 2007
- Secretariat - Central Switzerland - Secretariat
- Secretariat
Planning dates = targets for
organizational unit activities abroad

Fund accounting
Hans Krummenacher, Berlin 8.5.2008 21
 Funds = work baskets

Balan- Profit and loss account Balan-

ce (periode) ce
sheet sheet
Income/
1.1. 31.12.
earnings

cost/
expense

Point in time Point in time

Hans Krummenacher, Berlin 8.5.2008
t (timeline) 22
Mobilisation of earmarked funds

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

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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)

Hans Krummenacher, Berlin 8.5.2008 24

Mobilisation of earmarked funds
IZA: + 13.9 Mio. Partial statement:

SAM - 0.2 Mio.

Caritas
general - 1.5 Mio.
Small business- 0.2 Mio.
25

Total + 12.1 Mio.

Hans Krummenacher, Berlin 8.5.2008
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
Hans Krummenacher, Berlin 8.5.2008 26
Suggested solutions(III/III)

Set targets, and

clarify by using key data.

Hans Krummenacher, Berlin 8.5.2008 27

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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Hans Krummenacher, Berlin 8.5.2008
Donations trend 2001 - 2011

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

Hans Krummenacher, Berlin 8.5.2008 31

Thank you for your attention!

Hans Krummenacher, Berlin 8.5.2008

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