International Federation of Red Cross and Red Crescent Societies – Annual Report 2015
Restricted financial performance (programmes and services)
The IFRC received 331 million Swiss francs of voluntary contributions for 2015 in support of its appeals and programmes, compared to 320 million Swiss francs in 2014. This increase can be attributed to funding received for the Nepal earthquake operation.
The IFRC also recovered 57 million Swiss francs of service fees in 2015 for fleet, logistics and other supplementary services. This compares with 48 million Swiss francs in 2014, with the increase being attributable to a demand for contracted services
Restricted operating expenditure (programmes and services), including indirect and other cost recoveries reached 396 million Swiss francs in 2015, compared with 344 million Swiss francs in 2014. The increase is attributable to the Nepal earthquake and Ebola emergency operations, as well as contracted services in Africa.
During 2015, funds held for field operations (restricted reserves) were reduced by 31 million Swiss francs, from 220 million to 189 million Swiss francs, as funding received in 2014 for Ebola and Syria crisis emergency operations was spent in 2015. The remaining funds held for field operations are earmarked for ongoing recovery operations and development programmes.
Unrestricted financial performance
The IFRC’s unrestricted income consists primarily of statutory contributions from member National Societies. In both 2015 and 2014, the IFRC’s unrestricted income totalled 40 million Swiss francs. The IFRC also funds unrestricted activities such as management and leadership through a 6.5 per cent indirect cost recovery against restricted programmes and services and other cost recoveries, notably including pledge fees charged to donations to cover the costs associated with meeting specific donor requirements. Indirect and other cost recoveries for 2015 amounted to 25 million Swiss francs compared to 22 million Swiss francs in 2014. This increase can be attributed to the Nepal earthquake and Ebola emergency operations, as well as contracted services in Africa.
The IFRC’s unrestricted operating costs were 64 million Swiss francs in 2015. This compares with 62 million Swiss francs in 2014.
The IFRC holds unrestricted reserves to maintain a sound financial position to ensure that the organization is able to continue its operations and thereby fulfil its mission. The unrestricted reserves are available to mitigate a broad range of financial risks including working capital, non- current receivables, and settlement of non-current liabilities. The IFRC Governing Board’s policy is to maintain a strong level of reserves so as to maintain stakeholder and donor confidence. The balance of the unrestricted reserve on 31 December 2015 was 47 million Swiss francs, compared to 43 million Swiss francs on 31 December 2014.
The increase of 4 million Swiss francs is, in part, attributable to a reclassification of reserves for logistics and vehicle fleet cost recovery from restricted reserves to unrestricted reserves, in accordance with a decision of the General Assembly, and in part to reduced unrestricted operating expenditures. These increases are partially set off by accounting adjustments that result from following the requirements of International Financial Reporting Standards to account for the cost of the IFRC’s pension plan for IFRC employees, which are partially set off by a strong performance on the IFRC’s financial portfolio. The IFRC’s pension plan is subject to Swiss law and was fully funded at the end of 2015.