Every Pound Lost on Conversion Is a Pound That Doesn't Reach the Programme
Charities and NGOs sending money overseas face the same currency mechanics as any business, with two differences that change the calculation.
The first is that the money isn't the organisation's own. It was donated, granted, or raised for a purpose, and every percentage point lost in transit is a reduction in what reaches the beneficiary.
The second is that trustees have a duty to apply funds efficiently — which makes unreviewed conversion costs a governance matter, not just a finance one.
Where the cost sits
The mechanics are familiar to anyone who's read our other pieces, so briefly:
The spread. The margin between the rate you receive and the wholesale rate. Invisible, uninvoiced, and typically the largest cost.
Correspondent deductions. Intermediary banks taking a slice on the way, so the partner organisation receives less than you sent — which then creates a reconciliation problem for a field office with limited finance capacity.
Exposure between budget and disbursement. A grant approved in sterling and disbursed over eighteen months in local currency carries real risk. If sterling weakens, the programme delivers less than was approved. If it strengthens, you have unexpected headroom and a different problem: a variance to explain to a funder.
That third one is the underappreciated risk in grant-funded work. The budget was the commitment. The exchange rate decides whether you can deliver it.
What charities can do
Fix rates on committed grants. If you've approved a grant to be disbursed in a foreign currency over a defined period, a forward contract fixes the sterling cost. The programme gets the full amount it was promised, and your finance team knows exactly what it costs. For restricted funds especially, this converts an uncertainty into a number.
Batch disbursements. Many organisations send frequent small transfers to the same partners. Small transfers are priced worse than large ones. Consolidating into fewer, larger conversions — even where the onward local payments stay frequent — reduces cost without changing programme delivery.
Hold currency where you spend repeatedly. If you fund a country programme continually, holding a balance in that currency, funded at better rates in larger amounts, avoids converting in small increments at whatever rate applies that week.
Use local rails where available. Cheaper, faster and less exposed to correspondent deductions than international wires. Availability varies enormously by country — it's worth asking specifically about the corridors you use.
Ask about restricted currencies. Some jurisdictions have limited convertibility, documentation requirements or slow processing. Know before you commit to a disbursement schedule, not afterwards.
The governance side
Trustees should be able to answer three questions:
What do we pay to convert and send money internationally? Expressed as a percentage against mid-market, not as "our bank doesn't charge fees".
What's our exposure on multi-year grants and restricted funds? If a currency move of 10% would leave a programme underfunded, that's a risk register item.
When did we last review the arrangement? Many charities have used the same provider since before the current finance team arrived.
Documenting these decisions matters as much as making them. A charity that has considered its currency exposure and decided not to hedge has made a defensible governance decision. One that has never considered it has an unexamined risk, which is a different thing entirely in front of an auditor or a major funder.
Due diligence on providers
The safeguarding point applies with particular force here. Money held by payment institutions is not protected by the FSCS; funds are safeguarded in segregated accounts instead, under rules the FCA strengthened in May 2026.
Before appointing a provider, check the FCA Register yourself, ask how client funds are safeguarded and with which institutions, and confirm the legal entity matches your contract. For an organisation holding funds on trust, that check isn't optional diligence — it's the job.
Also ask whether the provider has experience in your specific corridors. Sending money to Western Europe is a solved problem. Sending it to parts of sub-Saharan Africa, Central Asia or the Middle East is not, and generic capability isn't the same as practical experience in the countries you work in.
One number to start with
Take your total international disbursements for the last financial year. Estimate the conversion cost at 2% — a conservative figure for organisations that have never reviewed it.
That number is what your currency arrangements cost your beneficiaries last year.
For most organisations it's the first time anyone has expressed it that way, and it tends to make the review happen.
William Fuller, Co-Founder of Orbis Exchange Group contact on 0203 918 5622
Ben James, Co-Founder of Orbis Exchange Group contact on 0203 918 5621