More with Less: Managing Treasury for a Global Development Organisation

Global development organisations (GDOs) have unique missions. Catholic Relief Services (CRS), the official international humanitarian agency of the Catholic community in the United States, has over 70 years of giving hope to a world of need. Founded in 1943 by the Catholic bishops of the US to serve World War II survivors in Europe, CRS has expanded in size to reach more than 100 million people in 91 countries on five continents.

Headquartered in Baltimore, CRS’s mission is to assist impoverished and disadvantaged people overseas, working in the spirit of Catholic social teaching to promote the sacredness of human life and the dignity of the human person. Although the mission is rooted in the Catholic faith, the organisation’s operations serve people based solely on need, regardless of race, religion or ethnicity.

Operations

At CRS, the headquarters (HQ) treasury team’s work is largely determined by events and needs at the field level, which is served by its very dedicated and experienced field staff and project holders. This is especially true in the case of large-scale disasters and emergencies, like the recent Philippines typhoon Haiyan. These large global emergency responses typically require immediate 24-hour on-ground response and relief efforts, along with planning and developing a long-term multi-year rebuilding plan. In response to this need, CRS has developed a comprehensive financial toolkit and team to mobilise a full scale global response. The HQ treasury team is incorporated as a supporting unit in this toolkit.

Organisationally, the business model of providing assistance requires GDOs to operate bottom-up with a lot of management and decision-making taking place in the field. CRS country offices are staffed by project managers with knowledge and expertise in healthcare, agricultural, water and sanitation, and temporary housing responses.

Secondarily, project managers are expected to practice competent financial technical knowledge as they and the local finance support teams are tasked with managing critical core cash management responsibilities in many developing countries with limited banking systems. The local offices will depend on the advice and support of the HQ treasury team for core cash management direction. It is not uncommon that the rush to respond to ground relief efforts takes priority over arriving at sound cash management solutions.

Challenges

Most HQ treasury operations in GDOs are challenged to meet the dual comprehensive responsibilities of managing the global and HQ treasury operations while supporting international teams for several reasons. Much of it is due to the focus and emphasis of maintaining a low overhead cost structure in order to direct every possible dollar towards beneficiaries.

Smaller-sized GDOs typically lack the scale to develop a separate and dedicated treasury staff team unit. Medium-to-larger GDOs with small-sized dedicated HQ treasury teams of one to three staff are caught spending a majority of time supporting complex international operations and global cash positions while responsible for a wide variety of areas that may include some accounting, risk management, investment management, and even donor fulfilment services. Time left is devoted towards directing the growing trends of centralised treasury, business process improvements, requests for proposal (RFPs), policies and procedure development and speeding adoption of new technologies.

The global cash management operations of GDOs are not much different than large global for-profit companies. This includes managing the global cash position, foreign exchange (FX) currency strategies and compliance with international rules and regulations, including the Office of Foreign Assets Control (OFAC), the agency of the US Department of the Treasury tasked with administering and enforcing trade and economic sanctions.

Doing More with Less

CRS has a dedicated treasury unit team of just under three full-time staff to support 91 countries, global cash, risk management and investment management. As a GDO, CRS has one of the lowest support ratios while at the same time operating in an increasingly competitive environment for obtaining donor funds.

Treasury likewise has strived to lead by following best practice cash management models while doing more with less, by focusing on several crucial:

  •  Establishing and relying on strong bank partner relationships.
  •  Establishing clear and strong policies and procedures.
  •  Educating and re-educating staff on best practices.
  •  Adopting the most recent technologies to streamline and enhance efficiencies.

One of the most effective ways to succeed has proven to be peer review with other GDOs. A few years ago, CRS, ChildFund and World Vision formed the Association of Global Development Treasurers. The exchange of ideas and best practices generated by this association has proven to be invaluable. With help towards solving similar challenges with operations and locations, it is like doubling or tripling the efficiency of treasury without increasing staff size.

The tricky part of navigating through the shoals of managing the risks of global cash management while following best practices and doing more with less is recognising limitations. Knowing what is feasible with a small treasury unit in the GDO culture is very important.

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