© GGGI. MOU Signing ceremony between the Minister of Foreign Affairs (MOFA) of the Republic of Korea, H.E. Park Jin and GGGI Director-General Frank Rijsberman for Korea’s increased 2023 core contribution. Seoul, Korea, 2023.
CHAPTER 9
Organizational Effectiveness & Efficiency
© GGGI. A man working in the waste-to-resource facility in Lao PDR. Lao PDR, 2023.
Our Strategy 2030 sets the goal for GGGI to be “a well-positioned as a world class, effective, and agile intergovernmental organization that is respected, financially sustainable, efficient, transparent, accountable and considerate of its people.”
In 2023, GGGI fortified its financial standing, showcasing remarkable growth and stability. With a surge in total revenue to USD 83.1 million, marking a substantial 25% increase over the previous year and a notable 172% growth since 2017, GGGI remained robust in its operations. Supported by an operating surplus of USD 3.2 million and a significant rise in earmarked funding to USD 65 million, GGGI not only sustained its reserves at 110 days but also diversified its financial support base, setting the stage for further expansion and impact in the coming years.
GGGI remained in a strong and stable financial position at the end of 2023.
- Increased total revenue. Total revenue increased to USD 83.1 million in 2023. This is an increase of USD 16.5 million or 25% over 2022 and an increase of USD 52 million or 172% since 2017.
- Operating surplus of USD 3.2 million. GGGI recorded an operating surplus of USD 3.2 million in 2023 which is added to reserves. This enabled GGGI to maintain its reserve days at 110 days.
- Increased earmarked funding. Earmarked funding continued to increase with an increase of USD 13.7 million or 27% to USD 65 million (2022: USD 51.3 million)
- Earmarked funded expenditures increase to 80% of total. Project earmarked funded expenditures comprised 70% and program earmarked funded expenditures comprised 10% of GGGI total 2022 expenditures. This means that core funded 20% of activities down from 84% in 2017.
- USD 119.6 million of new earmarked commitments signed. GGGI signed a total of USD 58.7 million of new earmarked project commitments in 2023. As a result, the forecast for 2024 is a strong increase in total revenues demonstrated by a total 2024 operating budget of USD 105 million.
GGGI OPERATING RESULTS FOR 2017-2022
In 2017-18, GGGI spent down its excess reserves to finance growth and increase funding, as directed by the GGGI Council. The 2022 & 2023 financial results show the success of that strategy.
TOPIC | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
ACTUAL / USD'000 | |||||||
Core Contribution / Other Income | 23,733 | 24,501 | 32,937 | 17,796 | 17,406 | 15,261 | 18,110 |
Earmarked Program | 1,815 | 1,702 | 1,165 | 1,348 | 3,943 | 7,408 | 7,599 |
Earmarked Project | 5,049 | 9,557 | 13,685 | 22,127 | 32,796 | 43,959 | 57,422 |
Total Income | 30,597 | 35,760 | 47,787 | 41,271 | 54,145 | 66,628 | 83,131 |
Gross Expenditures | 44,701 | 50,362 | 47,682 | 44,725 | 53,661 | 69,888 | 85,371 |
Overhead | (584) | (683) | (1,084) | (1,778) | (2,680) | (3,959) | (5,391) |
Net Expenditures | 44,117 | 49,679 | 46,598 | 42,947 | 50,981 | 65,929 | 79,980 |
Total Surplus/(Deficit) | (13,520) | (13,919) | 1,189 | (1,676) | 3,164 | 699 | 3,151 |
GGGI OPERATING RESULTS FOR 2017-2022
In 2017-18, GGGI spent down its excess reserves to finance growth and increase funding, as directed by the GGGI Council. The 2022 & 2023 financial results show the success of that strategy.
AUDIT OPINION
GGGI received an unqualified audit opinion on its 2023 Financial Statements from its external auditors PwC. The complete audited financial statements can be found here.
EVOLUTION OF EARMARKED FUNDING AT GGGI 2017-2023
GGGI’s funding base has undergone significant changes over the years. In 2017, 99% of GGGI’s programs were funded by six key donors. By contrast, in 2023, GGGI had 43 different donors contributing to its funding base, with core funding amounting to 20% of total funds, project earmarked funding amounting to 70%, and program earmarked funding amounting to 8%. The number of donors contributing to GGGI has increased significantly, with 15 donors contributing at least USD 1 million in funding, accounting for 94% of the total earmarked funds. GGGI experienced an 850% growth in 7 years and diversification from 3 to 43 donors.
Figure 4: Earmarked Funding
GGGI EXPENDITURES 2017-2022
2023 expenditures are funded 70% by project earmarked funding and 8% program earmarked funding with core funding at 19%. This is a decrease from 84% in 2017. As GGGI’s core funding declined and accessing new core funding became exceedingly difficult, GGGI’s management introduced and positioned program funding, either as direct program grant agreements or through Trust Funds, as an intermediate between entirely flexible core funding and restricted project funding. Over the last several years this program funding has become significant, and in 2023, the combination of core and program funding increased for the first time since the decline of core funding that started in 2018. In 2022, it was 32% (core plus program), in 2023 it was 36%.
Figure 5: Expenditure by funding source
LIST OF RESOURCES PARTNERS
© GGGI. GGGI and SPC (Pacific Community) signing an MoU to support Pacific Countries and Territories (PICTs). Fiji, 2023
1. | Agence Française de Développement (AFD) |
2. | ASEAN-Korea Cooperation Trust Fund (AKCF) |
3. | Asia Water Council (AWC) |
4. | Bill & Melinda Gates Foundation |
5. | Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA)- Republic of Korea (ROK) Cooperation Fund |
6. | Canada: The Department of foreign Affairs, Trade and Development |
7. | Climate and Clean Air Coalition (CCAC) |
8. | Department of Foreign Affairs, Ireland (DFAI) |
9. | Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH |
10. | Development Bank of Latin America (CAF) |
11. | European Commission |
12. | European Union |
13. | Export-Import Bank of Korea (KEXIM) |
14. | Government of the Grand Duchy of Luxembourg |
15. | Italian Ministry of Environment and Energy Security |
16. | Italian Ministry of Foreign Affairs and International Cooperation |
17. | Korea Environment Institute (KEI) |
18. | Korea Environmental Industry and Technology Institute (KCID) |
19. | Korea Forest Service |
20. | Korea Foundation for International Healthcare (KOFIH) |
21. | Korea International Cooperation Agency (KOICA) |
22. | Ministry of Agriculture, Food and Rural Affairs of the Republic of Korea |
23. | Ministry of Economy and Finance of the Republic of Korea |
24. | Ministry of Environment of the Republic of Korea (MOE) |
25. | Ministry of Foreign Affairs and Trade of New Zealand (MFAT) |
26. | Ministry of Foreign Affairs of Denmark |
27. | Ministry of Foreign Affairs of Finland |
28. | Mitigation Action Facility (MAF) |
29. | National Audubon Society |
30. | NDC Partnership |
31. | Norwegian Ministry of Climate and Environment |
32. | PeaceNexus |
33. | Prince Albert Il of Monaco Foundation |
34. | Qatar Fund for Development (QFFD) |
35. | State of Chihuahua Ministry of Innovation and Economic Development, SIDE |
36. | The Adaptation Fund (AF) |
37. | The Global Environment Facility (GEF) |
38. | The Government of Australia represented by the Department of Foreign Affairs and Trade (DFAT) |
39. | The Government of the United Kingdom of Great Britain and Northern Ireland: Foreign, Commonwealth & Development Office (FCDO) |
40. | The Green Climate Fund (GCF) |
41. | The International Climate Initiative (IKI) |
42. | The North American Development Bank (NADBank) |
43. | The Swedish International Development Cooperation Agency (SIDA) |
44. | The U.S. Agency for International Development (USAID) |
45. | The Windward Fund |
46. | U.S. Trade and Development Agency (USTDA) |
47. | United Arab Emirates Ministry of Climate Change & environment |
48. | United Nations Development Programme |
49. | United Nations Industrial Development Organization (UNIDO) |
50. | United Nations Office for Project Services (UNOPS) |
9.1 ENHANCING EFFICIENCY
Efficiency in the not-for-profit sector is often gauged by the ratio of non-programmatic to programmatic costs. GGGI adheres to global standards, aiming to limit non-programmatic costs to 15%. These costs decreased from 32% in 2016 to 13% in 2023, surpassing the target set by the GGGI Council to reach 15% by 2023.
This year,2023, projected overhead is 13%, and there is a decision before Council to reduce GGGI’s overhead charge on projects from 15% to 13% and end the preferential overhead rate for core donors currently 7%. These numbers represent a huge effort from GGGI’s HQ staff to deliver more with less in a rapidly growing organization. Staff in Seoul HQ today are lower in numbers than in 2017, while the organization supported by HQ functions and people has more than tripled.
Further, GGGI’s 2023 annual budget spent on in-country programs was 70% and 60 % of GGGI’s core budget was allocated to vulnerable countries (LDCs, LLDCs & SIDS based on UNOHRLLS definition), in respect of GGGI’s CRF targets.
Figure 6: Financial Ratio Days
No Data Found
MANAGING RISKS
GGGI established a Risk Management Framework to identify and minimize high and significant risks systematically. It spans seven categories: Organizational Structure and Governance, Operational Program and Portfolio Management, Financial Management, Information Technology, Data, and Asset Management, Legal Management, Human Resources, and Work Environment. Each risk is assessed for likelihood and potential impact. In 2023 GGGI’s risk mitigation and management efforts continued to be compounded by external factors affecting our working environment. These include natural disasters, and violent conflicts due to political and social unrest in many parts of the world where GGGI works.
