Inside Save the Children International’s Rapid Response Treasury

The treasury team at Save the Children International has to be ready to respond to crises by channelling funding to some of the most remote places on earth – at a moment’s notice. Recent work to improve visibility and efficiency around several treasury processes has enabled the function’s global crisis response capabilities to ratchet up several notches. Here, TMI gets the inside story from two key team members of the not-for-profit’s treasury team.

Moving money across borders at speed can be tough, even under the best of conditions. But propelling financial donations into war zones and ensuring they are distributed to those who need them most, with minimal delays, is another task altogether. Yet this is exactly the kind of undertaking that is ‘run-of-the-mill’ for Save the Children International’s Treasurer, Edward Collis, and Global Head of Treasury Operations, Asha Kumari.

Founded in London in 1919 by Eglantyne Jebb and her sister, Dorothy Buxton, the Save the Children movement has grown worldwide over the subsequent century. Fundraising Members of the children’s charity have been established in 30 nations globally, with each member organisation being part of the Save the Children Association. Save the Children International itself is the movement’s international programming arm and operates globally in more than 60 countries.

In turn, those member organisations lead activities within their local territory and work with donors to fund programmes abroad through Save the Children International, such as supporting children in Ukraine and surrounding countries. These cross-border efforts are co-ordinated and delivered by Save the Children International – via teams in each country. Save the Children International oversees international humanitarian responses. As such, Save the Children International’s treasury team, which is based in London, plays a vital role as the financial backbone of the organisation’s charitable work worldwide.

Collis explains: “The individual Members raise funds in their home markets, both from the public and from institutional donors. Save the Children US might, for example, raise money in dollars, and they’ll send those dollars to the Save the Children International treasury team for certain projects. We’ll convert those dollars into the local currency for whichever countries we’re funding, and then we’ll send it on to those recipient locations.”

To help manage all of the FX and risk exposures that come with these kinds of transactions, as well as the fundamental aspects of cash management, and all of the receivables from fundraising members, the treasury team is equipped with 14 staff. In turn, these team members interact with around 100 banking partners and oversee approximately 500 bank accounts globally. On a monthly basis, the team monitors more than 4,000 FX transactions globally and an annual FX transactional deal value of in excess of $3bn.

“We’re also responsible for ensuring that we’ve got sufficient liquidity at all times. And we always try to hold as much as possible of that liquidity centrally in London,” reveals Collis. The aim with this approach is to minimise the amount of donor funds that are ‘at risk’ in the local country offices. “For example, given the geographies we operate in, it’s not uncommon that we’re working with rapidly devaluing currencies or with counterparties that are not quite as creditworthy as those in London. We make sure that the right amount of money is in the right place at the right time in the right currency while managing the risk surrounding these cash flows.”

Control over the investment of funds also resides with the London team, with the associated investment and interest rate risks being managed as part of that process. Overarching this, there is a significant level of compliance risk to take care of. By the very nature of what it does, Save the Children operates in many locations that are subject to sanctions.

“We’re permitted to operate under general humanitarian licences, but naturally we still have to be extremely careful about how we operate, and with whom,” notes Collis. “Consider a country such as Syria, for example. At present, it’s sanctioned. Our goal is to ensure that every last child in Syria survives, learns and is protected. Consequently, we work very closely with our banking partners to ensure we operate in the right compliant manner and funnel donations to where they are needed most.”

Clearly this approach is paying off, since the charity has reached more than three million Syrians to date, including at least two million children. And that is just one example. For Collis and his team, channelling money into the most challenging of locations is an ongoing task.

Maximising the available technology

Underpinning the demanding cash and risk management work that Save the Children International’s treasury function undertakes is a TMS from Coupa. While this was originally rolled out in 2015, even post-implementation, many treasury processes were still being executed on Excel spreadsheets or via manual confirmations through phone calls or even faxes.

Kumari explains: “When I joined the charity in 2018, one of my key agenda items was to improve the usage of the TMS and ensure that the rest of the team were fully utilising it. So, over the past few years, much of my time has been spent improving our payments efficiency, including getting rid of all the Excel files and offline applications that were used in parallel with the TMS.”

Once the core treasury operations team started using the TMS more fully, the treasury member control team, treasury back office and more broadly, other finance teams such as payroll and AP as well as country and regional office finance teams could also start using the system. This was particularly important for recording the forecast, as Kumari outlines. “Opening up access to the system meant that we could then know when a certain member is going to pay us a specific amount, which helped us to improve our liquidity and forecasting for our accounts.” 

Bank connectivity and payments automation also took a leap forward when Kumari joined the team. Before this, the TMS had only one banking partner connected. “Our main banking partner, Barclays, was connected to Coupa, but for our other relationship banks we were using online portals,” reveals Kumari. “But we were able to connect with them via SWIFT.”

We make sure that the right amount of money is in the right place at the right time in the right currency while managing the risk surrounding these cash flows.

As part of the treasury transformation Kumari was leading, the team also started sending faster payments, whereas previously they had used BACS or similar international payment formats. “We didn’t even have instant payments set up for intercompany movements of funds previously. If we were funding from one Barclays account to another, that was sent as a regular payment, which took time, was costly and, looking back, was quite inefficient.”

Save the Children then began looking into its dollar flows and investigating whether it could use the domestic US clearing system to send ACH payments to local US banks. “We opened up an account with a US-based bank, which now means that if there are any payments due to US bank accounts, we can use the ACH channel,” Kumari explains.

In addition to this US-based work, the team can now centrally execute local ACH-type payments in some of the extremely challenging countries where the organisation operates, first through its regional banking partners and then through some bilateral relationships.

Globally, the charity has also been undertaking an international payments project to solve an issue in its supply chain on the procurement side. This centred on the roll-out of a one-stop platform for suppliers. After onboarding through the platform, online invoices can be posted through the procurement system, which then link into the ERP, which in turn generates a payment file that connects to the TMS and sends it to the relevant banking partner.

“We’re now on the journey to connect the rest of our 60 country office accounts,” reveals Kumari . “Not all of them have banking partners with the SWIFT capability where they are. As such, we had to recruit a few regional banking partners that could cover most of our country offices, so today we have around four regional banking partners covering more than half of our country office locations. We will have connected two of these banking partners by the end of 2022 covering 29 countries.”

Paying it forward

A primary focus for the Save the Children treasury team is to get the best FX rates possible on international payments, to demonstrate to the donors the best use of their funds. This is one area where the automation of processes and integration of banking partners has delivered results. Visibility over bank accounts is another.

“Three years ago, when we started on this journey, our bank visibility in the TMS was just 35% – and that was across around 600 accounts,” notes Kumari. “Part of our push for visibility has been to close accounts where they’re not needed. By the end of last year, our visibility had reached around 85%. Much of this was down to the added focus on improving statement reporting from all the country offices.”

Indeed, country offices in countries such as Sudan, Ethiopia, and Yemen, have all helped to contribute to this greater visibility, even though they have reduced banking infrastructure compared to established and advanced countries. “Perhaps the biggest challenge for them was to get SCORE [Standardized Corporate Environment] membership,” recalls Kumari. “Some banks were already part of the FIN network but not SWIFT’s SCORE network, which facilitates interactions between banks and corporates. We got them to sign up to the SCORE membership to enable them to send us SWIFT messages, which helped get our visibility up to the level where it is now.”

Naturally, the focus is now on the final 15% to increase visibility as much as possible. This has been a challenge for some country offices and local banks as they have limited technology at their disposal. In some locations, Save the Children staff have to go to a bank branch to obtain physical statements, which they then scan and import into the ERP/TMS. Another time-consuming issue can be when the bank offers its online portal only, meaning treasury has to download statements individually.

“We’ve been working with a third party called StoneX to try to bring more efficiencies here,” outlines Kumari. “StoneX is known as an FX provider, but it  also has a fintech hub – the company  developed solutions itself as it also had the same challenge of not receiving statements properly in some countries.”

Using the StoneX tool, all the Save the Children country offices have to do is download the non-standard statement format from their online portal and drop it into the automated file transfer system. This sends the data back to treasury in a format that can be consumed by the TMS and ERP.

“We are focused on bringing that visibility percentage up as far as possible,” enthuses Kumari. “We probably can’t get to 100% because some field offices have nothing to work with, but we’ll try to get up to 95% by the end of 2023. We can certainly live with that!” Save the Children International’s visibility percentage is currently at 90%.

While the Save the Children treasury has made great strides with account visibility, one of the biggest hurdles it has faced is on bank mandate control. Collis explains: “The challenge with bank mandates is that the framework can differ substantially from country to country. We were the first corporate to get MT940 reporting with a couple of our banks out of Yemen, for example, but even though the framework was there, it doesn’t seem to be the same as elsewhere.” What’s more, Collis continues, “even if you can put a system in place to help standardise workflows, the regulation differs from country to country – in some jurisdictions, they’ll need a letter, while elsewhere they’ll accept electronic versions. It’s a cottage industry in its own right”.

Never a dull moment

Regardless of the number of external crises the treasury team is helping to respond to at any given time, the transformational work from the treasury team to support Save the Children’s global efforts continues apace.

“We are currently putting in place quite an innovative funding mechanism with one of our main transaction banking partners,” teases Collis. “This project speaks to all of the topics we’re focused on regarding visibility, payments and international funding. It is something new that I haven’t seen before, and we’re hoping to start to go live with it in early 2023. We will fill you in on the details when we can!”

All of the progress that the treasury team at Save the Children International has made to date also means that it is increasingly being asked to operate on a shared-services basis. Collis concludes: “We are working on a project with our Transformation Delivery colleagues to deliver FX shared services to Save the Children Members. That is our mission for the future, alongside supporting every last child in even the toughest of situations.”