Treasury Advisory in Times of Crisis

Treasury departments are all the same? Anyone making that claim has never encountered the special situation of an NGO treasury department. The underlying disciplines – from cash management to FX risk management – might be the same but the challenges are unique. This calls for dedicated guidance and advice, especially in times of crisis.

In today’s day and age, with globalized economies, fast-paced business environments and volatile conditions at best, it is hard to imagine effective treasury management without system support. Yet, for many NGOs and other humanitarian organizations this can be difficult to implement given their financing structures, funding allocation challenges and other constraints.

TMS support, guidance and advice for NGO treasuries

Ironically, in many ways NGOs – decentralized by nature and often operating in countries with limited infrastructure – stand to benefit most from a global TMS platform providing maximum transparency, visibility and control. That is why Coupa Treasury has been supporting NGOs with free licenses for the treasury management system for years.

It was this free license program that kicked off Save the Children International’s journey with Coupa Treasury back in 2014. What was going to be a simple software implementation quickly turned into much more. Save the Children International realized it needed in-depth and targeted guidance and advisory on how to make the most of their TMS and turned to the Coupa consulting team.

Save the Children International: the Treasury behind the Mission
Save the Children International exists to help every child reach their full potential. The NGO works in around 115 countries in a variety​ of capacities. They operate about 500 accounts worldwide with 110 banks.

The unique treasury challenges of an NGO

It was the unique requirements of an NGO that prompted Save the Children International to seek further advice from Coupa. But what is it that is so different about the treasury management of an NGO?

Complex organizational structures
The Save the Children movement includes 30 national fundraising member companies, 17 of which raise funds for programming and aid activities outside of their home territories, and Save the Children International. Save the Children International is tasked by the Save the Children movement with delivering all programming and aid activities globally wherever the 30 fundraising members are not present and do not operate. Save the Children International almost entirely operates as a single legal entity and this allows it to operate a fully centralized treasury structure. The central Treasury team liaises closely with fundraising members on one side to ensure that funds flow in a timely manner from these members and on the other side funds the 68 country offices, regional offices and advocacy offices globally.

Treasury challenges
The countries Save the Children International operates in are generally challenging from a treasury perspective.

Challenges include:

• Some countries with only partial or limited banking coverage
• Some banking partners with limited capabilities (for example limited SWIFT connectivity capability)
• Sanctioned countries where Save the Children operates under general humanitarian licenses. This requires particularly close and transparent cooperation with banking partners all the way through the payment routing.
• Local currency instability, requiring close management of local currency balance sheets to minimize the foreign exposure to Save the Children International. This is particularly challenging as often local currency financial markets do not support traditional financial hedging tools.
• Local counterparty and credit issues
• Local settlement issues

NGO treasury challenges:

• Complex organizational structures
• Extraordinary countries
• Rapid fund allocation
• TMS functionality

Rapid and regular need for global funding
Save the Children International operates a biweekly funding cycle, funding all 68 country offices, regional offices and advocacy offices globally, with funds often flowing into countries which are very challenging from a treasury perspective. In addition to the regular biweekly funding cycle, the treasury team have a service standard to get emergency funding to any global office within 48 working hours.

Save the Children International’s treasury management in Coupa Treasury
What does all of this mean for working with a treasury management system? It means that while all the functionality is there, processes sometimes need to be tweaked to meet the unique requirements of an NGO. Take for example the user permissions: In companies with a classic parent and subsidiary company structure these can be mapped and restricted in line with legal entities. But with an NGO like Save the Children International representing one legal entity in various locations, this isn’t an option.

Best-practice consulting guidance for Save the Children International

Before fully implementing Coupa Treasury, Save the Children International relied on mostly Excel spreadsheets, with large amounts of rekeying and non-standard processing. The journey they took with Coupa has been remarkable. Together, Save the Children International and Coupa were able to not only optimize the technological setup but to align and develop processes and workflows, and most importantly to build a strong relationship rooted in trust – something they would be able to fall back on years later when COVID-19 struck the economy. Throughout the process, the key focus was on these best-practice NGO consulting approaches:

• Think outside of the box and don’t feel constrained by how things are done “normally” – extraordinary circumstances call for extraordinary solutions.
• Focus on what you’re trying to achieve, then find the functionality and processes to do it – not vice versa.
• Hold regular meetings as part of ‘business as usual’ to constantly review established workflows and workarounds – make your TMS a means to an end.

Supporting Save the Children International’s treasury through COVID-19

Given the treasury challenges faced by Save the Children International’s treasury team, treasury operational processes have to be more resilient than perhaps would otherwise be the case. However, that doesn’t mean that COVID-19 and its aftermath haven’t impacted Save the Children International’s treasury team as hard as everyone else.

The COVID-19 pandemic has put banking and payment infrastructures around the world under pressure with partial or even full lockdowns and restrictions to banking services imposing challenges to funding local offices globally as well as local payment operations.

The global banking visibility and payments capabilities provided to Save the Children International’s treasury team through Coupa Treasury have been absolutely critical to the treasury team’s continued ability to fully provide funding as needed globally; providing this funding even as the treasury team itself went to remote working. Even more remarkably, Coupa consulting have continued to fully support Save the Children International’s treasury throughout the COVID-19 period with several important Coupa Treasury projects relating to improved visibility, new payment routings and more improvements to the straight-through processing operations continuing to move forward strongly.

Conclusion

In the last few weeks, the Coupa consulting team has spent many hours working closely with Save the Children International’s treasury team. This Coupa consulting team support has allowed the essential continuity of treasury services and support needed to allow Save the Children International teams on the front line to continue with their vital work of protecting the world’s most vulnerable children. When we at Coupa put in place the NGO free license program years ago, this is precisely what we were aiming at: help those who help others make a difference.

Want to learn more about our powerful treasury solutions? Time to discover Coupa Treasury.