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Jul 23, 2019 | Media Coverage

More charities need to plan for big falls in the value of the pound, Western Union warns

Falls of 10 to 15 per cent in the pound's value would render some overseas projects unviable, but many charities are not planning appropriately, the firm says

By Liam Kay

Charities need to accept that "hope is not a strategy" when dealing with volatile currency markets, and must do more to prepare for falls of up to 15 per cent in the value of the pound, according to the finance firm Western Union.

The warning follows new data from Western Union’s barometer report, which shows 43 per cent of charities that send or receive money abroad were absorbing the costs of currency volatility themselves.

The barometer also showed that only 5 per cent of charities were using market forecasts as the most important indicator when setting budgets, and were instead focused on historical averages.

Alex Lawson, head of hedging at Western Union, said that the likely increase in the volatility of the pound as a no-deal Brexit approached meant that charities should make sure they have a plan in place, or risk making their work overseas unviable.

"Doing nothing is not the way to go, as the risks are so great that things are going to be even worse than they are at the moment," Lawson said.

"Hope is not a strategy."

Read more at Third Sector online