Category: Grant / Fund Management
NGOs and Foreign Exchange (FX) – part 2
Woord en Daad implemented a strategy, whereby the currency profits/losses are compensated through a separate forex risk fund. The basic idea is straightforward: deposit all profits in a fund and withdraw all losses from that same fund. And monitor the balance. In this way, project budgets are not affected by exchange rate differences over which you have no influence, and a partner knows in advance which (local currency) budget can be counted on.
NGOs and Foreign Exchange (FX) – part 1
“Foreign exchange management for NGOs”. This was the title of a presentation by Arnold van Willigen, financial director of the Woord en Daad foundation, during the meeting organized by Partos. Organizations handle foreign currency and its inherent risks differently. All kinds of factors can lead to different strategies. For example: Who in the supply chain bears the currency risk? Some organizations choose to transfer the currency risk to the recipients end (by entering into Euro contracts). Other organizations take the currency risk themselves (by entering into contracts in local currencies). In any case, the lesson is that currency risk cannot be reduced to a financial risk.
Get your project financing well organized with ProjectConnect
Managing project financing is not always easy – you probably have experienced challenges like difficult grant conditions, overdue reports and the complexity of finding the right funds in order to efficiently implement development programmes on the other hand. Donors and not-for-profit organizations have a somewhat symbiotic relationship, they do need each other. That’s why managing…