The big challenges of money-flow between Denmark and NGOs world-wide – and how to solve them

ARYZE spoke with Jacob Strange-Thomsen, Financial Management Specialist from the Danish Foreign Ministry. We discussed how funding flows from the Danish government to NGOs operating globally and the security challenges alongside this, which ARYZE aims to solve.

ARYZE is tackling some of the greatest challenges caused by outdated financial infrastructures and incumbents. One of the often overlooked players, having to deal with these challenges, are authorities and regulators tasked with ensuring that government funds and support for NGOs and other non-profit organizations, are spent in accordance with their purpose and budget, making an impact where they are supposed to.

Denmark and the Danish government set aside a large amount of money each year to fund and support NGOs and non-profit organizations. The money is supplied through Danida, the Danish International Development Agency, as part of the activities of the Danish Foreign Ministry – who is tasked with monitoring the use of the donations.

ARYZE has engaged with the Danish Foreign Ministry on multiple occasions, in various contexts, as many of our interests are aligned – at least when it comes to making financial reporting easy and simple.

In order to shed some light on the challenges that the Danish Foreign Ministry face, when having to ensure that funds are spent on the activities that have been the basis for the funding, we have asked Jacob Strange-Thomsen, a Financial Management Specialist from the Danish Foreign Ministry, a few questions.

What are the biggest challenges the Foregin Ministry experiences in administering the distribution of Danida-funds?

The biggest challenge is to ensure that funds are spent according to the purpose, especially in fragile settings. This requires close monitoring by both the organisations that we support but also by Danida.

How do you ensure that the funds distributed by the Foreign Ministry through Danida are used for the right purposes?

It is secured through financial and narrative reports submitted to Danida, but also by our continuous dialogue with the organisations that we support about their work.

What requirements do you have for being able to track the flow of funds?

There are currently no specific demands in relation to following the flow of funds. However, being able to follow the flow of funds would be beneficial in order to get information about where funds are spent.

What do you perceive as the biggest challenges for NGOs, in regards to getting their funds to the right activities at the right time?

Many of the NGOs that receive funding from Danida operate in fragile settings where the circumstances don’t allow easy access to cash. This can potentially slow the implementation of programmes.

NGO
NGO Red Cross working in fragile settings

What would the perfect world look like for the cooperation between the Foreign Ministry, NGOs, and other countries, when it comes to achieving and securing the most possible value-creation from the Danida-funds?

When various donors coordinate their support, important synergies can arise. Thus, I believe that by having close cooperation with other donor agencies and NGOs we can secure the maximum value for money.

With the infrastructure being built and utilized by ARYZE, NGOs will be able to not only follow their funds from A to Z, but also easily extract this data to include it in their reports to Danida, on how funds have been allocated and spent.

For many NGOs, being forced to operate in the field with cash as the only efficient way to make payments and purchases is really difficult – not to mention potentially very dangerous. This is also one of the challenges that ARYZE is addressing with the multi-currency international payment app that will be provided – making NGOs and their partners in the countries of operation able to exchange money easily and safely.

At ARYZE, we hope to be the missing link that will enable close and mutually beneficial cooperation amongst countries and NGOs, helping them make a real and lasting impact for good in the world.

ARYZE is already engaged with a number of NGOs in order to ensure the most value-creation for them – striving to cut as many transactional and administrative costs as possible.

ARYZE is not just another financial institution – ARYZE is about empowering people to engage in value-creating interactions.

Thanks to Jacob Strange-Thomsen and the Danish Foreing Ministry for engaging with ARYZE and sharing their insights!

To read more interviews with industry professionals, please check out other articles on our blog. If you are interested in learning more about ARYZE and how we are able to solve some of the biggest global payment issues, please visit our website.

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