The UNV Strategic Framework 2014-17 (“Strategic Framework”) defines the scope and dimensions of UNV’s strategic direction and results over the four year period. Through the Integrated Results and Resources Matrix (“IRRM”), the actions and activities necessary for achieving these outcomes have been identified and the resources needed for undertaking the actions have also been summarized.

The Strategic Framework targets an increase in the number of volunteer field assignments each year from under 5,500 in 2013 to 10,000 by 2017, driven to a large extent by the Global Youth Volunteering Programme. As well, the number of online volunteer numbers are planned to double from 11,000 in 2013 to 22,000 by 2017.

Over the same period, the total value of UNV’s financial activity will increase from 2013 level of $210 million to almost $300 million per annum. It also plans to expand the direct contributions from external partners from 2013 level of $17 million to $50 million by 2017, which will fund increased programming in key focus areas.

The purpose of the UNV Budget Strategy 2014-17 and Beyond (“Budget Strategy”), is to outline the underlying plans and assumptions for mobilizing and deploying financial resources necessary for achieving the outcomes while minimizing risk to the future sustainability of the organization.

ENSURING PREDICTABLE AND RELIABLE INCOMEUNV’s income is planned to be derived from three sources: (i) Regular “core’ funds allocated through UNDP for institutional expenses; (ii) funds received from UN Agencies and other sources for volunteers mobilized; and (iii) contributions from external partners for programming and joint programmatic partnerships.

(i) Over the years, core funds received from UNDP have been the foundation for UNV’s financial stability, providing a steady and reliable base to plan its operations. However, as UNDP’s core resources have come under pressure, it has led to a reduction in the amount allocated to UNV. While we have constructed the Strategic Plan, the Budget Strategy and supporting operating actions with this trend in mind, it is important that this level of funding be preserved. Any further decline would severely impact UNV’s ability to achieve its strategic objectives.

(ii) The vast majority of UNV activity relates to recruitment and management of volunteers placed on assignment with UN Agencies and Missions. UNV receives funds to cover costs of payments made directly to the volunteers or on their behalf. Currently, UNV also receives a percentage of these costs as payment for the service it provides. However, there is no direct connection between the total amount collected and the total cost of service provided leading to a mismatch between the two and creating undue surplus/deficit in UNV’s resource level depending upon number of volunteers and their specific costs. At a more granular level, the percent method attributes direct costs unevenly between volunteers receiving identical service and level of support. A key component of the Budget Strategy is a clearly enunciated set of policies and procedures to recover the cost of services it provides. This is collectively called UNV Cost Recovery Policy.

(iii) To expand the contributions from external partners for programming, UNV has developed a Partnerships Strategy to engage more intensely with a broader range of traditional and non-traditional donors, including emerging economies and private foundations. A portion of resources received from these partners provides funds for volunteers via the Full Funding scheme. However a significant portion is also received to support other programmatic work in the form of Cost Sharing, Special Voluntary Fund (SVF) and Trust Fund resources. It is anticipated that these will double to $18 million per annum over the course of the next four years (Figure 2) and provide funding needed to seed programmes covering key areas of UNV engagement – Youth, Peace, Basic Social Services, Disaster Risk Reduction & Environmental Resilience, Volunteer Infrastructure - as well as for innovation in volunteerism and for volunteerism advocacy.

UNV BUDGET STRATEGY

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Figure 1: UNV Target: 10,000 UN Volunteers

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Figure 2: Building Flagship Programmes

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Figure 2: Building Flagship Programmes

BUILDING INCREASED PROGRAMME EFFECTIVENESS & EFFICIENCY

Investments & InitiativesMeasuring the various indicators and targets within the IRRM and tracking the organizational progress towards achieving these, present a significant business challenge related to both technological and operational capacity. As such, UNV intends to make significant upfront investment (Figure 3) in both systems and capacity development to ensure that sophisticated data collection and mature results-based management (RBM) practices are established appropriately.

Included within these practices is the ability to reliably collect feedback on results achieved by the volunteers and their experiences. This input will enhance UNV’s ability to evaluate the effectiveness of its engagement and provide valuable lessons for innovation in the design and delivery of future assignments.

As indicated in the Strategic Framework, UNV will systematically assess and validate all of its results and the effectiveness and impact of all of its substantive activities through thematic and country-level / global evaluations. As such, strengthening UNV’s evaluation capacity to conduct these in accordance with the UNDP Evaluation Policy and related guidelines is critical. To maximize transparency and accountability, evaluation reports and management responses continue to be available publicly.

Further, in order to effectively handle the increased volume of transactions related to higher volunteer numbers and improve quality of administrative support to its volunteers, UNV intends to enhance existing IT systems and applications. These investments will take utmost advantage of existing corporate UNDP systems and will be based on assessment of current and future business needs.

The global communications environment is rapidly changing as new technologies and platforms are emerging and crowding out traditional lines. Against this backdrop, UNV faces the challenge of engaging globally with its diversified stakeholders and successfully conveying corporate messages and priorities. Towards this end UNV intends to develop tailored communication products through various media for the different partners and audiences. Such focused and strategically targeted communications, including websites, campaigns, social networks, etc., will better convey UNV’s results and articulate the benefits of volunteering.

Enhanced Field SupportIn order to achieve the ambitious targets, it is imperative that UNV rapidly escalate the capacity of its operations that cover more than 120 countries. These operations are supported by UNV personnel located at UNV Headquarters in Bonn, Germany as well as with UNDP country offices and with UN Missions.

UNV plans to gradually increase its complement of field-based personnel over the course of next four years by 32 – from 163 to 195. Concurrently, the number of staff based in Bonn will be reduced gradually through natural attrition and as appropriate opportunities arise. As Figure 4 indicates, the average number of volunteers covered by each personnel is rising (blue triangle), indicating increased operational efficiency.

The objective of the enhanced field support is to create the infrastructure of substantive knowledge and supervisory support that will boost volunteers’ potential for impact within their assignment. Given the dynamic nature of demand for skills, the additional field personnel will be geographically located to allow UNV the ability to adapt quickly while supporting staff’s career and capacity development needs.

Figure 3: $6.3m in new Investments & Initiatives

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Figure 3: $6.3m in new Investments & Initiatives

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Figure 4: Increased Field Presence & Efficiency

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Figure 4: Increased Field Presence & Efficiency

Leveraging Information & Communications Technology (ICT)UNV’s ICT Investment Plan (2014-2017), provides for innovative use of technology to enhance field unit operations, knowledge mobilization and information sharing. It will also help the business drive, the development and rollout of platforms for scalable service support and streamline results-based management monitoring and reporting.

By fully integrating its ICT investment plans within UNDP, UNV will continue to leverage corporate infrastructure, including the Atlas ERP system for Finance and HR management, cloud computing, e-mail messaging, learning systems, etc. in a cost-effective manner. Plans also include the use of Atlas e-Recruit & e-Hire functionality for more efficient volunteer management. Specific corporate needs, including online volunteering and volunteer reporting will continue to be managed via bespoke systems.

Planned investments in ICT are estimated to total just over $3M during the period 2014-2017. Each investment will be supported with a business case to ensure acceptable Return on Investment (ROI) and receive appropriate prioritization. Including on-going operating expenses, ICT spend will remain at around 1.1% of UNV’s total financial activity. By comparison, UNDP has historically averaged 1.3% and the global corporate average is 3.5% (Gartner Group).

IMPACT ON VOLUNTEER COSTThe total cost of enhanced field support, investments and initiatives is estimated to average $4.1 million per annum over the four year period from 2014-17. This will be covered through a monthly charge contained within the proforma cost of each volunteer.

In this regard, UNV understands its responsibility to manage the cost of volunteers and remain financially and operationally attractive for UN Agencies to engage with. To address this issue comprehensively, while ensuring that UNV assignments provide attractive opportunities for the best qualified volunteers in the world, UNV has undertaken a review of the conditions of service of its international volunteers, including benchmarking against other volunteer sending organizations.

COST RECOVERYThe Budget Strategy has been formulated with the financial framework and mechanics provided by UNDP’s integrated development and management budget concepts. These include:

Î Standardized categorization of “Development Effectiveness” that allows programme delivery to be charged directly for cost of development programs/activities. In case of UNV, this relates to the costs associated with the mobilization of volunteers and management of their assignments and associated payments.

Î Harmonized cost recovery (8%) on non-core activities to cover management costs attributable to non-core business and eliminate cross-subsidization from core resources.

These concepts serve as a set of principles that help define a revised cost recovery methodology as summarized below:

Î Volunteer costs will include a share of direct costs incurred by UNV for managing volunteers, including identification and recruitment, management of entitlements, travel arrangements, etc. These costs are considered “Development Effectiveness” and are in line with UNDP’s process of recovering costs for staff and operating structures (Executive Board Decision 2010/32);

Î A Harmonized Cost Recovery equaling 8% of expenses will be charged for Cost Sharing, Trust Fund and Full Funding modalities. This charge will cover UNV’s cost of managing these funds and is in line with the new harmonized cost recovery mechanism and rate decided by the Executive Boards of UNDP, UNICEF, UNFPA and UN Women (Executive Board Decisions 2012/27 and 2013/9). SVF is a source of predictable and stable donor country funding for special UNV initiatives and will not be subject to 8% cost recovery.

The Budget Strategy integrates the forecasted impact of all income sources and planned usage for corresponding programme and management expenses to build a holistic view of UNV’s financial resources. In addition to following established corporate policies, the revised Cost Recovery policy allows UNV to:

Î Highlight to its clients the value of services volunteers provide through proper pricing for different modalities

Î Establish transparency in conveying the full direct costs of recruiting and managing volunteers versus the costs associated with maintaining a corporate presence and operations.

Î Create appropriate internal incentives to drive the recruitment and administration of increased numbers of volunteers regardless of their source of funding

Î Reduce risk from potential reduction in core UNDP resources

Figure 5: Enhanced Field Support & Investments

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Figure 5: Enhanced Field Support & Investments

The United Nations Volunteers (UNV) programme is the UN organization that promotes volunteerism to support peace and development worldwide. Volunteerism can transform the pace and nature of development and it benefits both society at large and the individual volunteer. UNV contributes to peace and development by advocating for volunteerism globally, encouraging partners to integrate volunteerism into development programming and mobilizing volunteers. UNV is administered by the United Nations Development Programme (UNDP).For more information about UNV, please visit www.unv.org.

EFFECTIVE ORGANIZATIONAL STRUCTURE & STAFF DEVELOPMENTAs in the case of UNDP’s Structural Change exercise currently underway, UNV’s plan to increase its regional presence mentioned previously in this document, is designed to maximize effectiveness in delivering on the new Strategic Framework. By being closer to the field, we remain agile and responsive to UN Agency demand for volunteers and the fast changing role of volunteerism.

In order to ensure professional UNV staff build and maintain strong understanding of UN business in country offices and Missions, UNV has created a “candidate pool” to enhance talent management, career development, succession planning and an environment of dynamic career mobility. In conjunction with a proper process for managing Temporary Appointments and Detail Assignments, this allows staff members outside Bonn the opportunity to rotate into HQ positions and staff members at HQ to gain field experience in order to accelerate their careers.

While fully leveraging UNDP’s Learning Management System (LMS), the Budget Strategy places continued organizational priority on funding for developing staff’s “soft skills” and job competencies.

RESERVES AND CONTINGENCY PLANNINGAlthough UNV is targeting strong growth in volunteer numbers and in its total programme delivery over the next 4 years, it is fully aware that changes in the macroeconomic environment can adversely affect donor country ability to increase contribution. These conditions can also reduce funds available to UN Agencies for fielding volunteers. Most importantly, a big drop in size and scope of UN Missions could reduce the need for volunteers with significant impact on UNV’s operations. It is with this perspective that UNV plans to phase its investments and new initiatives cautiously and in full sync with changes in income.

The organisation has targeted its reserves of non-core funds to cover at least 18 months of salaries paid from non-core resources, as a safety cushion against uncertainty in business growth. This appears as the green bar in Figure 6. However, as UNDP core funding drops (see black line in Figure 6) and staff costs increase, this amount increases sharply over the years leaving a much smaller, though adequate, level of additional reserve. Organizational structure, operating expenses and investments will be proactively managed to ensure this is maintained.

BUDGET STRATEGY AS A MANAGEMENT TOOL UNV’s Budget Strategy encapsulates the financial impact of implementing various operational strategies, plans and activities underlying its Strategic Framework 2014-17 and IRRM. It highlights the vital investments needed to build a stronger organization that more effectively serves the needs of its volunteers and enhances their ability to deliver results for the host agencies. Importantly, it also provides UNV the opportunity to more firmly align its financial and operational practices within UNDP.

While the environment has improved over the last few years, global economic conditions remain challenging, particularly in the traditional donor countries. Against this backdrop, the Budget Strategy forces an increased level of prudence in management of resources and assessment of business risk. With a multi-year horizon, it also establishes the framework against which UNV management conducts financial planning and allocates resources on an ongoing basis.

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Figure 6: Reserves of Non-Core Management Funds

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Figure 6: Reserves of Non-Core Management Funds