FINANCIAL OVERVIEW


Photo: Neil Palmer/CIAT

FINANCIAL OVERVIEW

CGIAR greatly appreciates the contributions made by all its funding partners, and would like to thank its valued investors for their support, without which none of its work would be possible.

With an annual research portfolio of just over US$900 million, involving approximately 11,000 staff working in more than 70 countries, 40% of them women, the 15 CGIAR Research Centers are supported by Funders, countries, private foundations and regional and international organizations. These make a range of financial, technical and operational contributions, enabling CGIAR to pursue its strategic direction, follow agreed plans and deliver on promised outcomes and impact.

CGIAR funding is delivered via a multi-donor trust fund and on a bilateral basis. Harmonized funding is channeled through Window 1 & 2 of CGIAR’s multi-donor trust fund, with Funders providing Window 1 pooled contributions and designating Window 2 contributions to specific CGIAR Research Programs (CRPs). Funders also allocate funding to particular CGIAR Research Centers through Window 3 of the Fund, or bilaterally to Research Centers (outside the Fund).

In 2016, CGIAR System revenue declined to $919 million. This represented a decrease of 5%, or $52 million, in total System revenue, compared with 2015, when System revenue was $971 million. Also in 2016, CGIAR System expenditures decreased to $930 million, compared with $985 million in 2015, representing a reduction of 6%, or $55 million. CGIAR System expenditures included System entities costs of $16.1 million, or 1.7%, and $4.5 million for special initiative projects. The net result for the CGIAR System in 2016 was a shortfall of $10.4 million, compared with a shortfall of $13.8 million in 2015.

TABLE 1: SYSTEM REVENUES AND EXPENDITURES, 2016 AND 2015 (US$ MILLION)


In 2016, fund transfers to Research Centers from the CGIAR Fund (Windows 1, 2 and 3) represented 59%, or $543 million of total funding. Bilateral project grants represented 38%, or $346 million of total funding. The remaining 3%, or $30 million, was drawn from Research Centers’ own funds. Window 1 & 2 funding declined from $260 million in 2015 to $220 million in 2016, a decrease of 15%, or $40 million. By contrast, in 2016 Window 3 funding increased to $323 million from $294 million in 2015, representing a 10% growth, or $29 million. Bilateral project grants declined by 11%, or $43 million, from $389 million in 2015 to $346 million in 2016. Research Centers continued to use more of their own funding, increasing Center contribution by 6%, from $28 million in 2015 to $30 million in 2016.

CGIAR Research Program or portfolio expenditure represented 83%, or $772 million, of total CGIAR System expenditure in 2016, while non-portfolio research accounted for 15%, or 137 million. Research outside the Strategy and Results Framework remained minimal, accounting for just under 2% of total CGIAR System expenditure.

In 2016, CGIAR System expenditure by cost category remained similar to that of 2015, with personnel costs accounting for 42%, supplies and services for 27%, partnerships for 20%, travel for 6%, and depreciation for the remaining 5%.

FIGURE 1: SYSTEM REVENUE BY FUNDING SOURCE (US$ MILLION)


FIGURE 2: SYSTEM EXPENDITURE BY ACTIVITY (US$ MILLION)


Relatively higher volumes of expenditure were incurred in Sub-Saharan Africa, at 49% in 2016, compared with 45% in 2015. Expenditure in Asia, the Americas, Central – West Asia – North Africa (CWANA) all witnessed a slight decline, to 27%, 16% and 5% respectively, while that in Europe remained at 3%.

CGIAR System financial performance indicators have, on average, remained stable compared with previous years. Unrestricted net assets for the CGIAR System declined from $269 million in 2015 to $264 million in 2016, and days of operating reserves (as a long-term stability indicator) increased from 111 days to 118 days, a figure that is significantly higher than the minimum range of 75 to 90 days. The increase is a result of reduced operating expenses. The short-term liquidity indicator increased from 133 days in 2015 to 145 days in 2016, which is well above the minimum range of 90 to 120 days. The indirect cost ratio was lower in 2016 at 14%, compared with 15% in 2015. The current ratio is healthy and has remained flat at 1.4, while the cash management indicator on restricted operations is 0.57, indicating that bilateral activities are generally not pre-financed. The Financial Statements of all 15 Research Centers and the System Organization received unqualified external audit opinions. The Cost Share Percentage of 2% collected from all funding sources covered 97% of CGIAR System entities costs.

Financial summary of the CGIAR Fund

In 2016, funds received by the CGIAR Fund totaled $463 million. Of these, $448 million was accounted for by 2016 contributions, $11 million by 2015 contributions received in 2016, and $4 million by Cost Share Percentage collected from bilateral grants. Contributions allocated by donors in 2016 were $538 million. Of these, 83%, or $448 million, was received within the year, 17%, or $90 million, was received in 2017 for 2016, and $10 million was received for 2017. This represents a reduction of 3%, or $18 million, compared with 2015. Window 1 & 2 accounts for 34% of the CGIAR Fund, while Window 3 represents 66%. In 2016, Window 1 & 2 declined by 27%, or $65 million, from 2015 levels, while Window 3 increased by 15%, or $47 million, over the same period. The strengthening of the US dollar against other currencies accounted for 27% of the reduction from non-US dollar contributions.

FIGURE 3: CONTRIBUTIONS TO THE CGIAR FUND AND DISBURSEMENTS TO CENTERS (US$ MILLION)


Financial summary of the 15 CGIAR Research Centers

Compared with 2015, in 2016 Research Centers’ revenues declined by $52 million, or 5%, to $898 million. While most Research Centers reported flat or declining revenues, the Africa Rice Center, the International Potato Center (CIP), the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), and the International Institute of Tropical Agriculture (IITA) reported modest revenue growth. Research Center expenditure showed a decline of $55 million, or 6%, to $909 million. In 2016, 11 out of 15 Research Centers reported a loss, which was similar to the results for 2015. However, ICRISAT reported an extraordinary non-operational income of $4.3 million which increased their surplus.

TABLE 2: SUMMARY OF RESEARCH CENTER EXPENDITURES 2016 (US$ MILLION)


Financial summary of the CGIAR System Research Programs

In 2016, the Programs that made up the CGIAR 2011-2016 Research Portfolio came to an end. Additional information on total contributions and spend by CRPs for the period 2011 to 2016 can be found in the CGIAR Financial Report for 2016. Overall spending on CRPs decreased by almost 4%, year-on-year, from $802 million in 2015 to $773 million in 2016.

TABLE 3: SUMMARY OF CRP EXPENDITURES 2016 (US$ MILLION)


Notes:

  • The complete 2016 Financial Report is available at: http://www.cgiar.org/resources/cgiar-financial-reports/
  • The financial information contained in this report is based on the 2016 CGIAR Financial Report, which is aggregated from the 15 Audited CGIAR Research Center Financial Statements and the System Organization Financial Statement.
  • The International Center for Tropical Agriculture and the World Agroforestry Center have converted to International Financial Reporting Standards (IFRS), and most of the remaining Research Centers will comply with IFRS in 2017.
  • Additional information on 2016 CGIAR Fund contributions can be found in the 2016 CGIAR Financial Report, available online at: http://www. cgiar.org/resources/cgiar-financial-reports/