How Save The Children Protects Funds Against Exchange Rate Volatility
Protecting funds against exchange rate volatility was a priority for Save the Children.
"There is nothing more frustrating for an NGO than seeing how their funds can be distorted by market tensions," explains David del Campo, Head of International Cooperation and Humanitarian Action at Save the Children.
Ebury our partner worked with Save the Children around their humanitarian aid programme developed in the Philippines to alleviate the consequences of Typhoon Haiyan, which devastated the country in 2013. Having analysed the needs of the NGO to find the best strategy going forward, Ebury suggested solutions that help Save the Children maximise value, reduce the impact of exchange rate volatility and employ best-practice distribution methods.
Emerging market currencies, such as the Philippine Peso, are less frequently traded and accessing them carries greater exchange rate risk. That is because these currencies are often subject to reduced liquidity as well as increased volatility.
How Ebury helped Save the Children protect their funds
To mitigate the NGO’s risk and optimise the transfer of funds to their programme, Ebury helped Save the Children employ comprehensive risk management tools to cover their market exposure for the duration of the project. This provided a set exchange rate and peace of mind that their international transactions would not be affected by market volatility. The solution gave Save the Children visibility into the exact amount of funds which would be available on the ground and allowed them to maximise their impact.
David del Campo, Head of International Cooperation and Humanitarian Action, Save the Children (Spain), said: “We intend to achieve real and sustainable change in the lives of children and, especially, those who are in vulnerable situations. But exchange rate fluctuation is a nightmare for any NGO and can cause major disruptions to budgeting. With Ebury’s help we are able to counteract market volatility and thereby mitigate our risk. We know in advance when, and at what rate, we will convert donations into the local currency and see the total amount that will reach our target destination.”
Founded in the UK in 1919 by Eglantyne Jebb, Save the Children’s original mission was to help the millions of refugees and displaced children scattered across Europe after the First World War. They now work in 120 countries globally, allowing them to help 17.4 million children in 2014 alone.