This document summarizes a meeting to discuss changes to the Global Financial Model of AIESEC. Key points include: - The current model has challenges like lack of sustainability, flexibility, and high dependence on business development revenues. - The proposed new model would cluster services, have cost centers contribute based on the value received, establish investment funds, and allow for more flexible budget adjustments. - Business development would cover its own operational costs and contribute excess revenues to investment funds, while the Global Plenary would cover other services' operational costs. - Next steps are defining clear reporting, the roles of the Financial Steering Committee, and how the Finance Legal Board can support entities.

1. Global Financial Model
Changes proposed by Global Financial Model Meeting
9th – 14th November 2013, Rotterdam

2. 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.”

3. 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

4. Your presenters
MCP SGP
MCP GER

5. 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

6. New model to bridge the gap

7. The AIESEC we want to be

8. 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

9. Current State: Budget
Distribution:
49%
51%
AI
GP
How it looks like:

10. Current State: Funds
Distribution:
0%
100%
AI
GP
How it looks like:

11. Challenges of the current model
1.
Sustainability
- Core activities are not key source of financing
2.
High dependence on BD revenues
- Sustainability issue
3.
Organizational
Value
Value for
Members
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
Market
Value
Sustainable
Product

12. Fields of analysis
Global services (LGSC)
• Service benefactors
• Burden Sharing
• Global Service Sustainability
Network statistics (FLB)
• Ability to pay
• Sustainability & Profitability
• Investment capacity
AI BD data
• Possible contribution
• Sales & Investment

13. Fields of analysis
Decision Making & Reporting
• Flexibility of investments
• Coverage of needs of network and ambition
• Global ROI and investment reporting
2015 achievement
• AI resources needed
• Underutilized potential

14. 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

15. 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

16. New budgeting structure
Global Secretariat
PAI & VPFIN
Governance
Financial Management
Legal Management
Head Office
Long-term, organizational growth and development
2 Innov.
Global MoS achievement
OD & 6 OP
Global Communications
3 BXP
Global Sales and Partnership Management
5 BD
Information Management
2 IM

17. Cost centers contribution

18. 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

19. Cost center contribution
Global Secretariat

100% Global Plenary
Long-term, organizational growth and development

Global Plenary & BD
Global MoS achievement

Global Plenary & BD
Global Communications

Global Plenary & BD
Global Sales and Partnership Management

100% BD
Information Management

Global Plenary
(operational)

20. Funds for Investments
 Minimum size of the funds decided by plenary
 This amount will be contributed by the plenary
Fund 1
Fund 2
Fund 3

21. Funds for Investments
 Minimum size of the funds decided by plenary
 This amount will be contributed by the plenary
Minimum
amount
Fund 1
Minimum
amount
Fund 2
Fund 3

22. 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
Excess
revenue
allocation
Minimum
amount
Fund 1
Excess
revenue
allocation
Minimum
amount
Fund 2
Excess
revenue
allocation
Fund 3

23. The changes
Before
• Reciprocal limitation (51:49)
• Unused Potential
• Infelxibility
After
• Only minimums legislated
• Plenary covering
operational costs
• Excess revenue can be
achieved
Business Development covers:
1. The operational costs of the department itself
2. The investment funds following the legislated scheme

24. 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

25. 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