Ebury estimates poor currency strategies cost UK Charities up to £125m every year
London, UK (PRWEB UK) 28 October 2014 -- Ebury, the fast-growing fintech company that enables organisations to transact and grow internationally, has estimated that British charities are potentially losing up to £125 million due to insufficient currency procurement strategies and risk management processes.
Charities are under immense pressure to demonstrate their impact internationally, whether it’s poverty campaigning, relief work or disaster response. Those operating in emerging markets are faced with the additional challenge of currency access and effective risk management. This often results in charities exposing themselves to market volatility, risking hidden costs and lacking local market insight.
Mitigating currency risk is particularly important to small and mid-size charities, which are commonly underserved by major banks, both in terms of exotic currency provision and service. Charities of this size are not viewed as high profit clients and as such this band often seek currency access, better rates and service elsewhere.
Enrique Diaz, Chief Risk Officer at Ebury, commented that, “We have extrapolated the amount we save charities on average, to the rest of the UK third sector. The UK charitable sector received £10.4bn worth of donations in 2013 and with this in mind, foreign exchange losses of up to £125m per year are expected. This is despite these costs often being avoidable.”
Ed Fletcher, Business Development Manager at Hope for Children (HOPE), commented that, “When a company like Ebury approaches a charity and shows them how to save money, and become fiscally more efficient, it is really exciting. As a small, but growing charity, we are always on the lookout for new and innovative ways to reduce our costs. At HOPE we know saving £5,000, £10,000 or even more, is no different to a fundraiser raising the equivalent, and those savings translate into more money for our projects.
“Although managing foreign exchange risk may not sound like the most exciting thing in the world, saving money that will increase the funding of our work to help vulnerable children certainly is.”
Foreign exchange should feature in the strategic planning of a vast number of charities and not amplify the risk involved in working overseas. Beverley Traynor, Head of Business Development (Charities), Europe at Ebury commented that, “The flow of funds is crucial to any third sector organisation and any disruption to this process has the potential to cause large losses.
“Simple steps such as better market insights and hedging can make such a difference, especially for small and mid-sized charities. Unfortunately, to banks we are all just clients; charities included. Charities are much better off using alternative, expert foreign exchange providers who can add real value and personal service to such important organisations. After all, savings on foreign exchange mean more money can reach good causes”.
Sophie Douglas, Champion Communications, http://www.asg.com/, +44 20 7637 2587, [email protected]
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