CFO Peter Kimingi: Leaving a sustainable legacy


African Leadership Academy CFO is building a sustainable organisation that benefits tomorrow’s leaders.

For Peter, creating an enduring organisation is his legacy, and working with young people is essential to achieving that goal. He says, “By engaging with the youth, we remain focused on the present while ensuring the longevity of our future. The enthusiasm and positivity they bring to the table are what make it all worthwhile.” Investing in their futures and witnessing their transition into adulthood fuels his passion to continue doing what he loves.

Overcoming challenge

For over a decade, he has been working in the education sector and joined ALA in September 2019. “Little did I know that in just six months, we'd be facing a lockdown due to the pandemic. It was an incredibly difficult time for us, especially since our school is residential, with around 250 students living on campus, and an additional 20 staff members with their families- many of whom come from the rest of the continent and beyond. With almost all countries having already declared lockdowns, we had no choice but to lock everyone on campus down too”. With over 250 students on campus, they had to implement “internal" social distancing measures and restrict individuals coming in and leaving the campus. He says:

“Despite these challenges, we quickly made plans to ensure that our academic calendar continued with minimal disruption. Fortunately, we had already begun using technology such as Zoom in meetings with our remote staff, which proved to be incredibly helpful for our teaching and meetings.”

When borders started opening up, some parents wanted their kids back home as soon as possible. Few flights were available but at a very high cost that was, sometimes two to three times higher than normal, and the school had to bear the cost of getting some of these students home. The future looked very uncertain as all revenue streams were directly threatened by the uncertainty brought by the pandemic. The school relies on two main sources of income: student fees and philanthropic income. We anticipated that some parents would lose their incomes due to the pandemic as many businesses were forced to shut down. We also expected philanthropic income to be negatively impacted as some donors adopted a wait-and-see approach to assess the pandemic's impact on the business environment.

Driving the budget during Covid-19 was extremely challenging due to the emergence of new risks that were previously non-existent. In a typical year, a re-forecast would be done once, halfway through the year. However, the uncertainty brought about by the pandemic rendered this process inadequate as the operating environment was literally changing every week. New expenditure Covid-19 line items that were unheard of before, let alone budgeted for, such as extra sanitising costs, masks, investment in equipment required to effect social distancing, isolating and quarantine-related costs and testing and treating students who got ill. In addition, we accommodated most students on campus for an extra term as the travel restrictions in their countries would not allow them to travel back to their countries.

Peter says, “Our solution was to implement a three-month re-forecasting cycle with a substantial emergency fund to cater for unforeseen events. The Finance Committee met every three months to review performance and review and approve management’s assessment of all the likely scenarios of the next quarter, the remainder of the financial year and the following 12 months. The Committee’s work dovetailed with that of the Risk Committee which guided management on emerging risks and appropriate responses. This approach was quite effective in directing resources responsibly in an extremely fluid environment.”

In addition to the challenges they encountered during the pandemic, the sluggish state of the domestic and global economy has made it difficult to predict whether and when a recession or economic downturn will take place, the potential impact it will have on the philanthropic community and the potential ripple effect it may have on organisations that rely on donations such as ALA.

Reignited focus on sustainability

The pandemic has brought sustainability for non-profits discourse back into the spotlight. Over the years, ALA has been diversifying into programs beyond the Diploma Program into revenue-generating programs, all aligned with its mission. Although these programs were negatively impacted by the pandemic (as they relied on gatherings), ALA is building them back as they significantly contribute to the sustainability program.

Peter says another way to de-risk reliance on philanthropic income has been establishing an endowment fund. Since the inception of this fund in 2019 with US$5 million seed capital from a single philanthropist, it has grown significantly to over US$30 million to date. The endowment is permanently restricted, meaning that we can only draw down the income arising from the capital invested. This income stream will go a long way in securing the sustainability of the Academy into perpetuity.

He explains that endowments are essentially long-term investments derived from donations that come with donor-specific conditions on purpose and drawdown over time. They can be permanently restricted or term endowments. Permanently restricted endowment funds exist into perpetuity as the capital cannot be drawn under any circumstances while term endowments could be used up entirely over a certain period of time, such as 5, 10, or 20 years.

He explains that ALA’s endowment is invested in a well-diversified portfolio across different asset classes, markets and currencies to ensure that the fund returns an optimum return in the long run.

Designing and building success

He says his career has been shaped by the nature of organisations that he has worked for over the past decade. “I've had the pleasure of working with organisations that are so unique that they don't have competitors in the traditional sense. This makes it challenging to replicate their systems designs, team structures, workflows, policies, etc. While this can initially be overwhelming, the satisfaction that comes with designing, building and improving systems and processes makes the experiences extremely worthwhile.”

Consequently, his primary focus within these organisations has been to build systems and policies, which brings him great joy. He says, “I enjoy building effective teams and I am a firm believer that succession planning should come from within, especially in the finance and operations functions where intimate knowledge of the business is essential for success for leaders in these positions. I'm a strong advocate for professional development and encourage my colleagues to acquire new skills to advance their careers. It is always satisfying to get feedback from staff members that they appreciate my openness, trust, and encouragement to push themselves to be the best that they can.”

He says:

“Managing the endowment fund from beginning to date has been one of my most satisfying accomplishments. With oversight from our Investment Committee, I was able to bring the concept to life and establish a properly functioning endowment with a sound governance structure. This has been a remarkable achievement for me.”

This tech-savvy enthusiast encourages his peers to stay up-to-date with the latest advancements. Robotics, AI and machine learning, and other automation tools are emerging as key components in the workforce, and it's crucial to understand their impact on the job market and how they can boost productivity. He says, “Thankfully, technology is readily available and relatively affordable and can help teams and organisations maximise their potential. However, it's crucial for individuals to acquire skills that will help them leverage on technology and adapt one's role to take full advantage of technology.”

Peter Kimingi is also a member of the CFO South Africa community. To find out how you can become part of the community, contact our executive community director Georgina Guedes at [email protected]

Related articles

Are fintechs the answer to cross-border payment pains?

During a CFO South Africa webinar, Verto experts Tim Rudman and Ola Oyetayo, as well as Hatch Africa CFO Craig Sumption, unpacked the challenges and possible solutions when it comes to cross-border payments.