Charities could save millions on currency purchases, says report

Better FX confirms potential savings of between £20m and £50m on exchange rates

Charity Finance Directors' Group
Charity Finance Directors' Group

Charities that buy foreign currency can save millions of pounds through better planning and procurement, according to finance experts.

Better FX, published by the Charity Finance Directors’ Group and Stamp Out Poverty, an umbrella body that works to save money for international charities, explains how they can buy currency more cheaply.

The guide, which will be available from Wednesday morning, includes case studies explaining how charities have saved money.

They include Oxfam, which spends about half its income on currency and expects to save up to £1.5m a year after a revamp of its procurement processes.

The publication expands on Missing Millions, a November 2009 report by the same organisations, which highlighted the issue.

Nana Boakye-Adjei, lead researcher at Stamp Out Poverty and author of both reports, said even small charities could make significant savings.

"In our first report, we predicted the sector could save between £20m and £50m a year," she said. "The new findings support that claim."

The new report says that charities should make sure they have considered all the issues involved in buying currency, and look at whether their current systems are the most effective.

It says charities that buy funds centrally and at the correct time, and introduce a process of competitive tender, are likely to save money.

It also encourages the use of finance professionals, picking providers that are keen to do business with and understand charities, and talking to finance teams in other countries.

Bob Humphreys, finance director of Oxfam, said his organisation had taken several steps to improve currency procurement, including the purchase of all its currency in the UK rather than at local offices.

It also uses a trading system that allows it to buy currency in large amounts and compare rates very quickly.

"It’s been a chunky investment and requires one person to spend half their time just buying currency, but it has produced significant savings," he said.

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