'Millions wasted' on transfer fees

Charities could be paying over the odds to transfer cash abroad, say experts

Millions of pounds are being wasted each year by charities that pay too much to transfer cash abroad, according to campaigning organisations and international finance experts.

David Hillman, coordinator of Stamp Out Poverty, which campaigns for additional sources of finance for international aid agencies, told Third Sector that many charities wasted money through inefficiency.

He said his organisation and Bond, the umbrella organisation for international charities, had run seminars to help promote best practice.

"Many charities don't seem to understand that there's a competitive market out there," he said. "If you just ask your bank to send money abroad, you'll probably pay a higher percentage than you need to.

"There's an easy set of principles that a lot of organisations don't apply. Even if charities ask for only two or three prices from different organisations, it can save money."

Greg Vincent, head of foreign exchange for Europe, the Middle East and Africa at currency transfer firm INTL, said he had seen one organisation pay more than 10 per cent more than was necessary to move money abroad. "Charities around the world are wasting tens of millions," he said.

"Sending money out to Africa without making sure you've got the best price first is like walking into a car showroom and buying a car before you've asked how much it costs.

"In my experience, a charity that negotiates with several suppliers to get the best price can usually save itself between 1 and 2.5 per cent of its total costs.

"You can also save cash just by transferring it when you need it, and earning interest in the meantime."

Annemarie Moore, treasurer of US-based aid charity Plan International, said her organisation had been able to make substantial savings by taking advantage of its size and negotiating for the long term.

"We've minimised the use of local banks and we deal with our central suppliers wherever possible," she said.

"We negotiated heavily with suppliers to win the best price and we monitor our arrangements to make sure the price we've been quoted is the one we pay in reality, and that the price we see remains competitive.

"Historically, when we had sent money abroad, we had not taken advantage of the scale of our organisation. The money we sent was made up of lots of smaller transactions, and we ended up paying more."

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