1. CIFOR Finances

2. One key message …that has been repeated in last 3-4 years
CIFOR’s funding model has changed (and now more rapidly since phase 2 CRPs)…

3. Multiple shades of restriction…

4. Multiple shades of restriction…
2010: our funding was almost 50% unrestricted. This was used to “co-finance” projects

5. Multiple shades of restriction…
2011-
End of UR;
Advent of W1/2 funding;. use of W1/2 as UR to fill gaps; part of funding paid for new structure e.g. CRP MSU +CCT

6. Multiple shades of restriction…
; Funding cuts; delinking of W1 and W2; we were exposed by participation in single CRP; average loss of W1/2 per year ≈ USD 7 m

7. Multiple shades of restriction…
"The Center's funding model has changed rapidly in the last three years and has thrown up challenges in operations and financial management. FTA W1/2 allocations to the Center has reduced from USD 13.9m in 2013 to USD 5.4m in 2016 translating into an average annual USD 6.45m reduction in W1/2 funding. Total funding cuts compared to 2014 W1/2 levels in absolute terms, are USD 19.36m”.
Jose Campos, 2016 FS
2016: booked deficit of USD 4.8m for

8. Multiple shades of restriction…
CRP Phase 2: W1/2 fully restricted; Funding at FP level; FTA FP2 not funded in 2017; Comparatively W1/2 in 2017 is lower than UR funds in 2004; 100% transition to Restricted

9. So what does this transition mean for CIFOR?
Ability to "co-finance” research is severely limited (zero)
Inability to replenish reserves
New mantra : Continuous bilateral fundraising
To stay at current levels (which will not help us)
USD 100,000 per day
USD700,000 per week
USD 3m per month
What we need
USD 200,000 per day
USD 1.3m per week
USD 5m per month
Over last few years we have put lot of effort (successfully) to move staff time to bilateral
We need to spend funds effectively for partnerships and supplies & services
NCEs help only worsen the situation

10. How have OH and RS costs behaved over years?
RS+OH are about 31% of CIFOR operations
Vary based on total CIFOR costs
Not a linear relationship to direct costs
Current structure should support Center size of about USD 40m without new investments

11. Challenges
During the UR era, we were recovering less than 50% of OH+RS cost..
Over the last couple of years the gap between actual and recovery has come down to 10% with efforts to recover better, but we may have hit a plateau
Some new challenges 2017 onward, due to change in way we can use W1/2
End of DFID KNOWFOR brings new additional challenges in 2018
Non- recovery of CSP – we do not recover full costs and CSP in many cases

12. How are we addressing the issue?
No one single approach works as donor conditionality differes:w
Changing the RS cost driver from USD /staff hour to % of total cost
Including indirect costs (e.g. staff costs of support functions) as direct
This method has yielded about 3-4% additional recovery
However, there this has plateaued
With new funding opportunities (e.g. GLF) possible to move some support costs to project;
Increase event (other) income
Improve budgeting– being more realistic in budgeting; partnerships and services cost about 35% of proposals

13. We have deficits but financially we are ok? How is that?
Extract from 2016 FS
FY 2016
Undesignated Reserves USD 8.352m
There are also some USD 3m for capital replacement and crises in the designated reserves
As per day operating cost has reduced, despite the deficit, the “long term stability" days has kept above recommended range, though we have within 15 Centers moved from one of the strongest Centers to being mid pack

14. We have deficits but financially we are ok? How is that?
Extract from CGIAR 2016 Annual Report

15. We have deficits but financially we are ok? How is that?
Extract from CGIAR 2016 Annual Report

16. We have deficits but financially we are ok?
Forward looking
If we continue with the deficits into future years we will eat into the reserves and be less stable. So we need to avoid that.

17. Questions?