Global Financial Model

Changes proposed by Global Financial Model Meeting

9th – 14th November 2013, Rotterdam

Our vision

“Our Global Financial Model represents the entirety of all

entities and enables us to use our collective resources to

achieve peace and fulfilment of humankind’s potential.”

The participants

Lucia Taboada – MCP ARG & URY

Orion Joss – MCVPBD Brazil

Ana Saldariaga – MCP Colombia

Patrick Günther – MCP Germany

Thomas Tarler – MC VP FIN Ghana

Angela Wang – MC VP FIN MoC

Aleksa Nikolic – MCP Serbia

Nur Farzana – MCP Singapore

Karim Swelim – MCP UAE

Johannes Ide – AI VP FIN

Martin Tyser – Chair FLB

Your presenters

MCP SGP MCP GER

The principles

Utilizing synergies between enitities in the head office

Sustainable use of collective ressources to develop

AIESEC in a strategic and flexible way

Remove limitations for revenue generation to support

short- and long-term needs

New model to bridge the gap

The AIESEC we want to be

The background

AIESEC 2015 New organization New financial Model

Evolution of AIs role needed

Revision of AI services – LGSC & AI

New size and diversity of network

New financial distribution model – FSC & AI

New way of financing global activities and services

New financial model – FSC & AI

Current State: Budget

Distribution:

49%

51%

AI GP

How it looks like:

Current State: Funds

0%

100%

AI GP

Distribution: How it looks like:

Challenges of the current model

OrganizationalValue

Market Value

Value forMembers

1. Sustainability

- Core activities are not key source of financing

2. High dependence on BD revenues

- Sustainability issue

3. Lack of flexibility for innovation

- New expenses and investments to support the network limited

- AI and GP is limited in deciding on the size the global services

4. Lack of flexibility in decision making

- Legislating the budget twice a year without possible adjustments

Sustainable

Product

Fields of analysis

• Service benefactors

• Burden Sharing

• Global Service Sustainability

Global services (LGSC)

• Ability to pay

• Sustainability & Profitability

• Investment capacity

Network statistics (FLB)

• Possible contribution

• Sales & Investment

AI BD data

Fields of analysis

• Flexibility of investments

• Coverage of needs of network and ambition

• Global ROI and investment reporting

Decision Making & Reporting

• AI resources needed

• Underutilized potential

2015 achievement

Mindset of the new model

The financial model needs to reflect AIESEC mindset of 2015

AIESECs understanding as social enterprise makes us aim for a

entrepreneurial mindset, sustainability and growth

Global expenses should be delivering value to the customer of the

service and be sustained by the ones benefitting from it

Clustering of services

New proposal for supporting document

„Y - AI Services“ by LGSC

Clear structure for budgeting

Allocation of HR costs possible

Easier to measure ROI

New budgeting structure

Global Secretariat

Governance

Financial Management

Legal Management

Head Office

Long-term, organizational growth and development

Global MoS achievement

Global Communications

Global Sales and Partnership Management

Information Management

PAI & VPFIN

5 BD

OD & 6 OP

3 BXP

2 IM

2 Innov.

Cost centers contribution

Cost center contribution

BD is getting little value out of AI services

Plenary should finance the services it receives

BD will add more money to funds

No change in country fees

Unleash BDs potential

Cost center contribution

Global Secretariat

Long-term, organizational growth and development

Global MoS achievement

Global Communications

Global Sales and Partnership Management

Information Management

100% Global Plenary

Global Plenary & BD

Global Plenary & BD

Global Plenary & BD

100% BD

Global Plenary

(operational)

Funds for Investments

Fund 1 Fund 3Fund 2

Minimum size of the funds decided by plenary

This amount will be contributed by the plenary

Fund 1 Fund 3Fund 2Minimum

amount

Minimum

amount

Minimum size of the funds decided by plenary

This amount will be contributed by the plenary

Funds for Investments

Fund 1 Fund 3Fund 2Minimum

amount

Minimum

amount

Excess

revenue

allocation Excess

revenue

allocation

Excess

revenue

allocation

Funds for Investments

excess revenue allocated to funds

Allocation proposed by AI

Recommendation to plenary by FSC

Decision made by the Global Plenary on ILM/VLM

excess revenue will be added to funds based on legislated scheme

The changes

Business Development covers:

1. The operational costs of the department itself

2. The investment funds following the legislated scheme

Before

• Reciprocal limitation (51:49)

• Unused Potential

• Infelxibility

After

• Only minimums legislated

• Plenary coveringoperational costs

• Excess revenue can beachieved

Flexibility in the Budget

More frequent budget adjustments needed depending on excess

revenue

quarterly revision of the AI budget on VLM

Global Plenary decides on strategic

use of financial resources

Next steps

Definition of a clear reporting system

Quarterly reporting from AI and/or FSC

Investment and ROI reporting of AI to FSC/GP

Role of FSC

Investment approval

Budget line changes

FSC selection

Definition of role of FLB

coaching entities and serve as an advisory

the ideal state of the finances and legalities of the whole network