How treasury resilience is helping children around the globe
Treasurer at Save the Children International shares how treasury teams’ efforts to mitigate banking system failures, regulatory barriers and economic sanctions helped continue its humanitarian support in multiple countries.
One of the key challenges that treasuries at humanitarian international non-governmental organisations (INGO’s) often face is ensuring that funds are made available to beneficiaries on time.
Consider the UK based INGO, Save the Children International (SCI), which provides education, health care, economic and emergency relief to children and families in 118 countries around the world.
As a result of conflict, climate change and covid, SCI responded to 78 emergencies in 2021 helping over 17 million children. The number of emergencies that SCI is responding to is growing significantly and is not expected to slow down anytime soon. Its treasury team has a critical role in supporting these humanitarian crisis responses in some of the most challenging locations in the world.
SCI’s budget to provide relief in these countries has increased significantly in 2022 but multiple operational roadblocks, In response, the treasury team has been actively mitigating these risks to ensure that funds are delivered on time.
“After SCI’s people, the second most important resource that SCI relies on to deliver emergency humanitarian programming is cash” said Asha Kumari, Global head of treasury operations at Save the Children International at the 31st EuroFinance Treasury Management International in September 2022.
For instance, immediately after the Taliban’s regained control in Afghanistan, the country’s banking system was completely shut down and only gradually re-opened four weeks later with strict withdrawal limits. This meant that without any options to pay electronically, the need for physical cash increased dramatically and the treasury team had to find different methods to make sure that funding was available on the ground.
“SCI had huge programming demands that we met through close cooperation with our local and global banking partners and informal payment routes…we also had daily calls with our country office colleagues in finance, supply chain, procurement, safety and security.” Asha told delegates.
The treasury team also explored options to limit dependency on local banking services in Afghanistan, by making offshore payments to suppliers who continued to provide services in the country and had an offshore bank account.
Likewise, the treasury team was under similar stress following the escalation of conflict in Ukraine, as its programming budget expanded by over twenty-fold for Ukraine as children and families were displaced to neighbouring countries including Poland.
The problem was exacerbated as SCI didn’t operate an office in Poland and the treasury team had to specifically find a huge range of payment routes, new bulk payment support, new operations in Poland, new bank accounts and new cash distribution routes.
“We suddenly had to set up a new office and new branch in Poland, open up new bank accounts, look at new funding routes and try to find new cash distribution mechanisms.” Asha continued.
Collaborations and teamwork
Partnerships with both internal and external teams has been a key aspect in navigating through these complexities and challenges.
While finding alternative routes to transfer funds in the affected regions, the treasury team was closely working with their banking and FX partners in order to develop a clear, transparent and effective solution to mitigate challenges.
“We have benefitted hugely from sharing specialist knowledge as we have responded to these crises with other NGOs. Our banking and FX partners have also been very supportive as we have explored different funding and payment routes. ” Asha further said.
At the same time, treasurers worked hand in glove with the internal legal teams in order to ensure that their modified ways of working were well within the due diligence parameters.
While SCI’s treasury team was resourced for business as usual and not for high levels of humanitarian response or crisis funding, its response knowledge has dramatically improved over the last 18 months and the team has been increasingly deploying tools discovered from one crisis response to another.
The team is improving its bank account visibility with an aim to achieving 90% of its bank accounts reported on SWIFT statement reporting (MT940) which is a huge ask considering where SCI is present, implementing a live payment screening tool in order to create a centralised payment system where all its payments will go through the treasury management system. At the same time, the team further plans to expand payments via mobile wallets to create it as another payment type.
Save the Children International won the EuroFinance Treasury Excellence award in the Risk management and resilience category and its Global head of treasury operations, Asha Kumari also spoke at the EuroFinance International Treasury Management Vienna conference in September 2022.