Transition to the (new) Business Model Annual Meeting Bogor, 26 September 2016

Outline CIFOR Funding Transition A view outside CIFOR Transition to 2017 Changes, challenges, expectation and readying for the future

Remember this from last AM?

Transition to 2017..

Transition to 2017.. a different perspective

A view outside CIFOR

Evolution of CGIAR Funding 2011-15 W3/B funds in 2015 totaled 711, CG fund 260. 74% of funds raised by Centers. Source: CGIAR 2015 Financial Report

Center Performance 2015 Source: CGIAR 2015 Financial Report

Indirect Costs 2015 Source: CGIAR 2015 Financial Report

Center Financial Stability 2015 (adequacy of reserve in days) Source: CGIAR 2015 Financial Report CIFOR: Unadjusted for deficit in 2014-15

Center Liquidity 2015 (working capital in days) Source: CGIAR 2015 Financial Report

Transition to CIFOR 2017

The Transition Transition to 2017 (first cut) FY 2012 USD 37.7m revenue, W1/2: 7.1m FY 2012 USD 33.8m revenue, W1/2: USD 14.9 Ihave tried to compare years where our funding was quite similar. In 2012, we had about USD 34m revenue. We expect 38m in 2017. However, in 2012 we had almost USD 15m W1/2 and in 2017 we expect about USD 7m. The nature of funding is quite different. In 2012 our indirect cost base was 6.4m. Our indirect costs in 2017 are likley in region of USD 5.7m. RS is included in direct costs. W3/B finances only 9-10% Indirect costs. That has not changed. So a large chunk of it has to be financed by W1/2 and unrestricted. This was a high of 30% in 2012. Based on our funding forecast for 2017, this will be 41% of W1/2 in 2017. W1/2 and W3/B cover RS costs

CIFOR Revenue Forecast 2017 USD 37.7m funding forecast By Source of Funding By distribution OH recovery is 9% and RS is 3%

RS Costs 2017 (1st estimate) RS costs are USD 5.57m Our global presence alone costs USD 2.47m IT and Systems support costs another USD 0.8m RS recovery from W3/B is only USD 1.3m

IU Costs (1st estimate) IU costs are USD 5.67m

The Transition: some key changes We are already raising 64% more W3/B than in 2012 We can only charge up to the audited OH to W1/2 We are at present charging way beyond that Research Support costs will need to be covered by W3/B There are not enough funds for co-financing Uncollected CSP will have to be financed by Center funds

The Transition: what we need to do Fund raise : a constant and strong pipeline a combination of big and small proposals/projects Guidelines to assist with proposal budgeting Staff time budgeted adequately against grants OH recovery from W3/B may remain around 10%, thus: Be creative in converting some of our costs (RS and Indirect) into direct Find ways to charge CSP as a direct cost Provide adequate time to assist preparing and reviewing proposal Budget and promise to deliver only what is possible within financial limitations of the grant Deliver on our commitments

The Transition: what to expect Compliance matters will take front seat e.g. Financial Accounting guidelines in EU International Co-operation and Development projects (PAGODA guidelines) US NICRA Donor conditionality will likely drive how we spend the funds we receive; almost all funds we now receive are with restrictions Review and understand donor guidelines: What are eligible costs and financial reporting requirements What are staff cost accounting requirements What are requirements to account for indirect costs Additional audits (internal and external) Review and implement audit / 7 pillar recommendations Financial Reporting Timely financial reporting and invoicing Monitor AR and follow up of receivables

Ready(ing) for the transition A new Strategy 2016-2025 linking to the SDGs A new org structure The RDP team being strengthened Operational policies, procedures Key business processes (myCIFOR) RDP PMC HR Travel Event Management Reporting Etc.

Thank You! It is obvious Research Costs (incl. Staff costs need to be met from restricted grants)