Charity FX Basics: Sending Funds to Partners Overseas

Key takeaways

• Charities often lose money to FX spreads, bank fees, and timing when sending funds to partners overseas.¹ ²

• Mapping where money goes and setting simple FX rules makes project costs more predictable.¹ ³

• Using specialist payment tools can reduce friction so more funding reaches front line work.

If your charity supports partners in other countries, you already manage FX risk, even if nobody has used that phrase in a meeting yet. Grants are often approved in one currency, donations arrive in another, and your partners spend in a third.

Most of the time, exchange rate moves are small. Sometimes they are not. Several NGO case studies show that unplanned currency swings can cut directly into programme budgets and force uncomfortable choices like reducing activities or finding extra unrestricted funds.¹ ³

The good news is that you do not need a treasury department to improve things. A few simple steps can make cross border payments clearer, cheaper, and easier to explain to donors.

Why FX matters for partner payments

When charities manage foreign currency badly, the impact is immediate:

• Fewer households reached than promised

• Partners receiving less than expected in local currency

• Admin teams spending hours chasing short or failed payments

Guidance and research on NGO financial management repeatedly highlight foreign exchange as a major driver of budget variance and project risk.¹ ³ ⁴ Foreign donor funded projects are especially exposed when they must report in donor currency while spending in volatile local currencies.³

Three things combine to create trouble:

1. Multiple currencies. Income, holding currency, and spend are rarely the same.

2. Time lags. There are gaps between grant approval, drawdown, and field spend.

3. Opaque pricing. Banks and providers often hide FX margins inside the rate rather than in visible fees.²

Even small charities can reduce risk by making these factors more visible.

Step 1: map your partner payment flows

Start with a simple map. You do not need a new system to do this.

For the last 6 to 12 months, list:

• Countries where your partners are based

• Currencies you paid in

• Number and size of payments per country

• Typical payment method, for example international wire, local bank transfer, or card

You might discover patterns such as:

• Most of your partner spend goes through 3 to 5 currencies

• Some countries have many small payments rather than a few large ones

• Certain corridors have more issues with delays or returns

Universities and global research organisations use similar mapping when they manage multi currency projects, because it highlights where exposure and admin load are highest.⁴

Step 2: understand your real FX and fee cost

Next, take a small sample of payments and look closely at the numbers.

For each payment, try to capture:

• Currency and amount you sent

• Exchange rate that was applied

• Any visible transfer fee

• Amount your partner actually received in their currency

Then compare the rate you paid to a neutral reference, for example a mid market rate on that day. The difference, plus fees, is your total FX cost.

Studies of NGO budgets show that finance teams often underestimate this total cost because the margin is baked into the rate rather than shown as a separate line.¹ ² ³ Even a rough analysis will tell you if FX is a rounding error or a real programme cost.

Step 3: set some simple FX rules

You do not need a long policy. A one page note that everyone uses is much better than nothing.

Examples of light touch rules:

• Planning rate. At the start of a budget year or grant, set an internal rate for each major currency and use it for budgeting. Review it if market rates move more than a set percentage.⁴

• Thresholds for attention. Above a certain amount, for example the equivalent of 50,000 in your home currency, you consider tools like forward contracts or a specialist provider.

• Preferred channels. You define which providers and payment routes are acceptable for partner funding and avoid informal currency dealers, which have been flagged by auditors and oversight bodies.² ³

Research on foreign donor funded projects recommends careful planning of when to convert, and using efficient, transparent channels rather than ad hoc approaches.³

Step 4: tidy the payment workflow

Some of the biggest savings come from fixing process issues rather than chasing a perfect rate.

Common improvements:

• Collect full account details early. Ask partners for complete bank information (including IBAN or local formats and SWIFT/BIC where needed) during onboarding, not the day a payment is due.

• Validate data once. Save and reuse verified partner bank details so staff do not retype them every time. This reduces errors and returns.

• Batch payments. When you have several partners in the same country or currency, pay them together so you get a consistent rate and reduce admin time.

• Schedule regular transfers. If you send funds on a predictable timetable, scheduled payments help you land money on due dates and keep auditors happy.

International project support teams stress the value of planning foreign currency flows in advance to reduce both variance and stress on project managers.⁴

Step 5: consider specialist tools when the numbers justify it

If you have a meaningful level of partner payments in foreign currency, you may want more than a standard bank account.

Examples:

• Multi currency accounts. Hold EUR, USD, GBP, or other currencies in a single account, convert when it suits your budget, and pay partners in their currency without repeated conversions.

• Forward contracts. Lock an exchange rate now for a payment you know you will make in future, for example a large grant instalment in six months.¹ ³

• Batch payments. Upload one file to pay multiple partners in one go, with separate references and amounts.

• Scheduled payments. Align disbursements with grant milestones or partner agreements, rather than doing everything manually at the last minute.

Non profit treasury case studies show that combining planning rates with simple hedging and better visibility over cash flows can materially reduce FX surprises.¹ ³

FAQs

Do small charities really need to think about FX?

If you only send occasional small payments, detailed policies may not be necessary. It is still worth knowing what rate you are getting, which channels you use, and how much you pay in fees each year.

Is it always better to pay in the partner’s local currency?

Not always. Some partners prefer a hard currency like USD or EUR, especially in high inflation countries. The key is to agree a clear approach and to manage any FX impact in your budget rather than letting both sides guess.

Can we just wait and hope the rate improves?

You can, but this is a form of speculation. A more transparent approach is to decide whether certainty or potential upside matters more for a given payment, then act accordingly.

Do we have to explain FX to donors?

Many grant conditions already mention how to handle exchange differences.³ ⁵ Showing donors that you use systematic, transparent methods to manage FX can increase trust.

Conclusion and how Xe can help

International partner payments will probably never be the most exciting part of your charity’s work. Yet the way you handle FX can decide whether a grant comfortably delivers its outcomes or falls short.

By mapping your flows, understanding your real FX cost, and adding a few simple tools and rules, you can keep more of each donation working where it matters.

Xe Business supports charities and NGOs with multi currency accounts, international payments, batch and scheduled payments, and forward contracts that can be matched to real grant flows. You can explore our solutions on the Xe Business site or speak with a specialist about your specific corridors and constraints.

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The content within this blog post is for informational purposes only and is not intended to constitute financial, legal, or tax advice. All figures and data are based on publicly available sources at the time of writing and are subject to change. Actual conditions may vary depending on location, timing, and personal circumstances. We recommend consulting official government resources or a licensed professional for the most up-to-date and personalized guidance.

Citations

¹ FundsforNGOs, “How Currency Fluctuations Impact NGO Budgets” (2025).
² USAID Office of Inspector General, “Fraud Alert Pertaining to Conversion of US Dollars to Local Currencies in Conjunction with Complex Emergencies” (2023).
³ Texila Journal of Management, “Exchange Rate Fluctuation and Management of Foreign Donor Funded Projects” (2024).
⁴ UCSF International Research Support Operations, “Managing Projects Involving Foreign Currency” (accessed 2025).
⁵ ForumCiv, “General Conditions for Sida Grants” section on exchange rate fluctuation (2024).

Information from these sources was taken on December 12, 2025.