Non-profit and charity sectors: look after your people and manage the challenges
Guernsey-based Sovereign Pension Services (CI) Limited is compiling a series of articles exploring how globalisation and the changing employment market is impacting different sectors and employers.
This issue looks at the Non-Governmental Organisation (NGO) and charitable sector, often called the ‘Third Sector’. NGOs are independent not-for-profit entities dedicated to advancing humanitarian causes on both national and international scales, operating autonomously from governmental influence. Charitable organisations, on the other hand, are establishments committed to public welfare through acts of charity.
Various types of NGOs and charitable organisations exist, encompassing trusts and foundations, voluntary health entities, human rights advocates, environmental, conservation and wildlife groups, as well as other organisations. Trusts and foundations, which are private business entities, contribute financial support to charitable endeavours, including the arts.
These are all mission-driven entities that share a commitment to a cause rather than a profit margin. This sector often involves working cross border with a mix of both international and local staff, and often in challenging situations and locations.
The NGOs and charitable organisations’ market size has grown strongly in recent years. It will grow from USD331.43 billion in 2024 to USD353.21 billion in 2025 at a compound annual growth rate (CAGR) of 6.6%, according to the NGOs and Charitable Organisations Market Report 2025 by Research and Markets.
The growth in this period can be attributed to strong emerging markets growth, rise in household disposable income, corporate-NGO partnerships and increase in public donations.
The report predicts continued grow to USD443.2 billion in 2029 at a compound annual growth rate (CAGR) of 5.8%. The growth in the forecast period can be attributed to increasing corporate social responsibility, rising environmental awareness, increasing use of internet and economic growth.
This is a challenging sector on many fronts, especially with the recent headwinds. Funding is cyclical and volatile as the recent closure of the US Agency for International Development (USAID) by US President Donald Trump, after six decades of operations, vividly illustrates.
This makes it difficult to plan long-term. The impact of uncertainty means employment contracts are often short to medium term, which can make it hard to hold on to talent. Organisations can also lose leadership and expertise at inopportune times, particularly during times of increased risk or scrutiny, such as during a major crisis or political upheaval.
Add to that organisations can operate in a wide range of countries, where local legalisation can be a challenge, currency can be volatile and political situations can change. Security issues are also a growing trend. The United Nations (UN) confirmed that 280 aid workers died in 2023 and 281 in 2024, which it said was “the deadliest year ever for aid workers”.
The sector is also going through structural change and moving towards a more decentralised model of operation. Empowering local operations but needing to ensure compliance to policy and benefiting from economies of scale and simplicity where possible.
The major strength of this sector is its people. They are committed to their task and there is a strong collegiate attitude where people share knowledge and experience for the good of the sector. Humanitarian workers are passionate about what they do, with a can-do attitude and fortitude.
To meet the challenge of attracting and retaining staff and delivering on their duty of care as an employer, organisations were early adopters and have been using international pension and savings plans, often called ‘provident funds’, for decades.
International occupational pension and savings plans provide a cost-effective option with economies of scale. They are flexible enough to meet the challenges these organisations face by accepting a wide range of populations and locations, while the scheme rules and administration structures can be tailored to suit requirements and can be harmonised to treat people equitably.
For example, one plan can cover a global workforce and include all staff where there are no mandatory local pension benefits or where they are not considered sufficiently robust. The same plan can also include international staff who may move around the various country offices. The NGO can then harmonise the retirement benefits, which can be tiered by seniority or by staff category if required.
The most cost-effective option is for the plan to have one central administrative and payroll source but, if a decentralised structure emerges, organisations can use regional hubs to keep the costs lower by limiting the number of payroll sources. They can then recharge locally.
Organisations are always evolving, as missions conclude or change location, so an international plan is an easy way to bolt in new populations or remove old populations, as required.
Local staff will have the benefit of diversifying away from a potentially volatile local economy and currency. Employers can also include an additional voluntary savings portion to allow staff to save easily from payroll for life events such as marriage, house purchase or education, in hard currency. This can be deeply impactful and provides opportunities to all staff.
For international staff, this plan provides portability. It means they are not disadvantaged by a career working overseas and can enjoy a consolidated and consistent benefit. For NGO employers it helps to reward and retain talent and experience within the organisation.
The good news is that an international plan is simple to implement and administer and is also transparent in terms of information and fees. The latter can be paid either by the employer or the employee, or they can be shared.
Sovereign’s occupational international pensions and savings plan is a highly effective way to deliver on an employer’s duty of care, meet the challenges of global employee populations and save costs when budgets are under pressure.
We can build a new international plan or there may be organisations with existing plans that can save costs as budgets tighten and enjoy paperless administration by transferring to Sovereign’s digital solution.
For further information contact Jo Smeed below.
