The global landscape for charitable giving is shifting. According to the Charities Aid Foundation, corporate giving is growing significantly, even as individual giving remains flat. It’s a trend highlighted in Citi Global Perspectives and Solutions 2023 report that looks at charitable giving for the year 2022, Philanthropy and the Global Economy v3.0, which found that: “Philanthropy is becoming more affluent and more institutional, with consequences for both society and individual nonprofits.”
Yet the charity sector faces ongoing challenges, from the “digital divide”, for example, which can hamper smaller, less tech-supported nonprofits, to problems with currency volatility and high transaction costs. These trends underscore the importance of efficient fund management, and the role of financial services support in providing the advice, solutions and banking technology needed for effective global philanthropy.
Against this backdrop, Benevity, a Canadian based company that is a leading global provider of social impact software, has grown internationally and has processed more than $15 billion in donations to support more than 470,000 nonprofits globally. With the support of Citi Commercial Bank, the company has scaled its operations to meet the growing demand for corporate giving and volunteering worldwide.
The importance of CSR and global employee engagement
As businesses increasingly recognise the value of integrating social good into their culture, the demand for comprehensive Corporate Social Responsibility (CSR) solutions has risen, prompting firms such as Benevity to expand their reach globally, facilitating workplace giving, matching, volunteering and community investment programs.
Expanding globally is fraught with challenges around regulatory compliance, local laws, cross border transactions and cultural and market differences. Benevity’s experience highlights these complexities. Lance Ludman, Chief Financial Officer, says: “We move approximately $2.5bn of our clients’ donations around the globe annually. We needed a platform that could handle this efficiently and with confidence.”
Regulatory landscapes vary significantly across regions, lending intricate complexity to compliance. Additionally, cross-border transactions involve different banking systems, currencies and payment methods, making the process cumbersome and time-consuming. Ludman stresses the importance of speed and accuracy, especially during crises: “When there’s a crisis, our clients want their funds doing good immediately.”
Strategic financial cooperation
Citi Commercial Bank plays a pivotal role in supporting Benevity’s global growth. Through its extensive network and financial expertise, Citi Commercial Bank provides tailored solutions that have helped to streamline Benevity’s operations, ensuring reliable fund disbursements and enhancing overall efficiency. One key product facilitating this is Citi’s WorldLink® Payments Services,® which allows Benevity to manage cross-border payments efficiently.
Ehtesham Hazarika, Citi Commercial Banker for Benevity, highlights the importance of WorldLink: “It enables clients to make cross-border payments using ACH (automated clearing house) rails, at significantly lower cost than traditional cross-border wires. This adds crucial value for Benevity and its foundation partners, allowing them to scale and pay nonprofits globally with minimal cost.”
Similarly, the bank’s CitiConnect® platform has been instrumental in managing Benevity’s complex payment processes. This API (application programming interface)-enabled gateway allows for integrated communication between Citi’s systems and Benevity’s ERP (enterprise resource planning software), allowing the smooth exchange of transactional information and efficient fund management. “CitiConnect makes execution of payments simpler, even when processing multiple payment files in a day, each carrying thousands of transactions, often millions in value. CitiConnect also makes it possible to send enriched transactional data back to Benevity, which offers them visibility into critical information such as payment status, credit confirmation, cost transparency and more, thereby allowing Benevity to extend transparency down the value chain” says Hazarika.
Overcoming sector-specific challenges
The philanthropic sector comes with other unique challenges, particularly regarding cross-border payments and regulatory compliance. Hazarika points out that while the volumes of payments processed for Benevity are high, individual transactions can be relatively small. Screening all payments for AML (anti-money laundering) within a reasonable time frame is, he says, a continuous challenge.
Certain regions also pose specific regulatory hurdles. For instance, India’s Foreign Contribution Regulation Act (FCRA) adds a layer of intricacy to making foreign donations to Indian nonprofits. “Making a foreign donation into an Indian charity is often not as simple as initiating a wire; it requires specific encoding and routing through a state-owned bank. Citi’s ability to track regulatory updates and advise on such nuances is invaluable for Benevity,” says Hazarika.
Towards a philanthropic future
Looking ahead, Benevity aims to further expand its services and reach more multinational clients. Ludman says, “We expect growth from expanded demand for volunteering solutions. Continental Europe has been a new growth market for us. Charitable activity in Europe most often takes the form of corporate volunteering, but increasingly also donations. Citi Commercial Bank’s support is crucial in understanding and navigating the nuances of each market.”
The journey of Benevity and Citi Commercial Bank offers key insights for other businesses considering global expansion. Strategic financial collaboration is essential in managing regulatory compliance, navigating local banking systems and maximize operational efficiency. As the global landscape evolves, businesses must remain agile, leveraging the expertise of financial institutions to adapt and thrive in diverse markets.
In a world increasingly marked by polarisation and geopolitical tensions, the role of organisations like Benevity becomes even more critical. By maintaining constant dialogue and providing support to nonprofits that strive to alleviate the impact of these struggles, Benevity will continue to make a significant impact. In tandem, Citi can guide Benevity through this complex landscape, helping to ensure that philanthropic funds are managed efficiently and reach those in need. In a time when global unity is fractured, Benevity’s commitment to global good and Citi Commercial Bank’s support demonstrates how institutions can work together to help build a more compassionate and connected world.
As Casey Coates, Head of Commercial Banking in Canada concludes: “Leveraging our global network and our solutions to support Benevity with navigating a complex landscape is a cornerstone of Citi’s offering to mid-sized corporates and non-profits. Our collaboration has enabled Benevity to optimise its operations and propel the organisation’s movement towards a philanthropic future”.
