We interviewed Muna Wehbe, the CEO of the Stars Foundation. Set up in 2001, the Stars Foundation invests in organisations and ideas that transform the lives of disadvantaged children and their communities globally. We discussed Muna’s career path, the funding choices of Stars Foundation and its impact on NGOs.
About Muna Wehbe:
Muna has been Chief Executive of Stars Foundation since 2002 when she joined as its first employee. Prior to this, Muna worked for five years with Procter & Gamble, managing multi-million-pound product portfolios in the UK retail and wholesale sectors, and managing the graduate training programme for the UK Sales division. Muna also spent a year project managing the office merger of a Dubai-based insurance broking firm with another broker in the UK.
Educated at the London School of Economics, Muna holds a BSc (Hon) in Management and speaks four languages. She is a Trustee of the Association of Charitable Foundations, and is the proud mother of two girls.
Could you give me a little bit of background about your personal experiences and what you were doing before joining the Stars Foundation?
Muna: I started my career at Procter and Gamble in sales and marketing, and I spent five years there. I really enjoyed it and got a really good grounding, but I lost my motivation towards the end of my time there. The mission of the organization was to improve the lives of the world’s consumers – in many instances this translated into launching more haircare lines and washing up powders. I didn’t feel I was making a difference in the world and there weren’t any roles in the organization that really inspired me, so I left. I knew I wanted to get into the social space, but I wasn’t sure what exactly I wanted to do. Then, I was introduced by chance to our founder, His Excellency Amr Al-Dabbagh. He put me through a series of interviews over six months and finally offered me the job of starting the first office for Stars Foundation. The organisation was registered in July 2001, and I joined a year and a half later. I have been there ever since; thirteen happy years.
Could you briefly introduce Star’s mission and values?
Muna: Stars was founded by a Saudi philanthropist and businessman, Amr Al-Dabbagh. We are funded by his company which is a multi-national entity that operates across various business sectors. The mission of Stars has always focused on improving the lives of children. There are some values that have been at the core of Stars from the start: finding and working with organizations that are doing great work for children, rather than running projects ourselves; identifying a niche where we can provide the most value with the funds we provide organizations; being open to all faiths and ethnic backgrounds. I remember our Founding Chairman saying to me early on “A child can always unite people. There are very few human beings on earth who would not help a child if s/he was in trouble. Your instinct is to offer a helping hand, regardless of their background, religion or skin color; they are just a child.” The other reason for supporting children, which our founder talks about, is that this gives people the best possible start in life. An educated child is more likely to be an educated adult.
Have you found the niche you want to tackle?
Muna: We quickly realized our niche was not going to be what we funded, but how we funded. We now fund via something we call ‘flexible funding’, meaning the money we give is not tied to certain programmatic outcomes. We don’t determine the outcomes that we want from the funding we give. We ask the organizations to determine what they want to do with our funding and what outcomes they expect to achieve.
When we agree to fund an organization, we let them know that they can spend the money on anything they need; from salaries, to investments, to operating costs, to training, etc. The only caveat is that it does have to be charitable, to comply with the restrictions of the Charity Commission in England and Wales, which we are governed by as a registered charity. If it isn’t charitable, we will then explain why the funds can’t be used in that way, but such a situation is rare. Once the organization has determined its plans, it then tells us how it will measure its achievements, and that is what it eventually reports back on. We also allow the organization to change its mind if circumstances change. This is what happened with one of our awardees in Lebanon, who asked to divert some of their award funding to respond to the influx of Syrian refugees. So our niche is really around how we fund: flexibly and directly (no intermediaries), and who we fund: locally-led organizations, mainly in the Global South. It is a different model, compared to how most foundations fund.
Would you say you fund more international charities, and projects outside of the UK?
Muna: First, we pick and fund organizations, not projects. We select organizations based on what they have accomplished to date, and the strength of their management practices. The combination of those attributes tells us that an applicant is a really strong organization in terms of its capacity to operate, and that it is an organization that is delivering impact. If it has both of those qualities and is selected for an award, then we can offer flexible funding. The organizations we award are registered locally, and are locally-led. We are interested in local NGOs. If we were to fund in the UK, it would be an NGO that was started here, registered here, and run here. While we are a global foundation, most of our work has been in Asia, Africa, Latin America, and the Middle East. Recently, through the With and For Girls Award, we have expanded to Europe and North America, which are places we haven’t funded before.
Will you tell me more about the Impact Awards?
Muna: We allocate all of our funding through awards programs; the flagship programme is the Stars Impact Awards, which we started back in 2007. We look for organizations that have both strong institutions and strong programming, focused on children across three regions: Africa-Middle East, Asia-Pacific, and Latin America-Caribbean. Within those regions, we focus on a certain set of countries, and we move out of those countries after two years. The aim is to find strong locally-led autonomous NGOs in as many locations as possible, to demonstrate that they exist all over the world and can be supported directly. The robust selection process takes about nine months to complete and was developed originally with PricewaterhouseCoopers LLP.
We have 24 Impact Award winners this year, eight across each region. Each winner gets US$50,000 in flexible funding. They get capacity building support too, and an opportunity to raise their profile. We do a lot of press work with them, and this year they will be announced and awarded at the Philanthropreneurship Forum. It is a great networking opportunity for the Impact Award winners. The aim is to signpost these organizations for other donors. We tell them, “We have been through this extensive process to find strong organizations; let us partner with you, see what meets your interest areas, and then let us talk about how we can go about funding them together.” Lots of people want to have that conversation, and many are interested in working with other donors who are interested in similar NGOs.
Was this the idea in the first place or did it develop over the years?
Muna: When the award started, it was about finding excellent NGOs and showcasing them to the world. This helped them raise their profile and, in some cases, receive additional funding. Over time, we had other foundations saying, “I am interested in talking to you. Can you help us find an NGO?”. This started the conversation around fundraising and we realized we had a product that others may be interested in, that could help to mobilize more direct support for strong, locally-led NGOs.
Is your organisation trying to promote the idea of not spending so much time on reviewing applications? It seems that foundations and NGOs complain about the time spent on the whole process.
Muna: For us, it is important to look more broadly at the organization as a whole. The questions we ask are different than other funders. We often get feedback about how insightful the application is because it forces the applicant to reflect upon their finances, systems, and processes instead of mainly asking about future projects. When we go out and visit NGOs as part of the assessment, we spend three days getting to know the organization and its staff. This tells us a lot more than a written application.
We brought in two well-respected external consultants who spent six months interviewing and visiting our awardees, talking with the team, and looking at our process. The independent review was very interesting for us. It highlighted a lot of areas that had been debated internally. It took us about a year to think about how we should respond to the findings in the report. One of the big changes was moving from an open process to ‘proactive sourcing’. Previously, any eligible organization could apply for an Impact Award. This resulted in 124 applications the first year and 150 in the second. Seven years down the line we had hit about 1,600 applications from 85 countries. This is a lot for a team of 4 and is a lot of time invested for organizations that don’t end up winning. We realized our team was spending the bulk of its time evaluating applicants that would never make it past the first round of the process. Especially as we write a feedback letter to every organization that applies, and reply to every email and question we receive. We were spending our time in the wrong place, not adding enough value to the process, to Stars, or to the organizations. Now organizations are nominated by referral partners in our focus countries. It ensures applicants have a much higher chance of being selected for an award, making the time they invest in the application more worthwhile, and it means our team’s efforts are spent on those organizations that stand a better chance of winning.
Foundations are quite insular as organizations. They have very clear views of what they want to know, and often when foundations have tried to come together and combine their application process, for example, it has failed because their needs are quite different. For the With and For Girls Award, we have come together with seven other funders and created a system we are all happy with; it has one application process that we run across the whole award for all the funders involved. To do this, we negotiated, and in some cases let go of, certain requirements in order to reach a happy medium. We have made it as un- taxing as possible for the applicants, keeping in mind that these are small organizations with limited resources. It has been really interesting and so far, it has worked. For the Impact Awards, that is also what we are trying to do with the partnerships we are building. We cover 90% of what most funders would look for, but then for organizations who partner with us, we can ask more specific questions about the projects awardees will want to run in the future.
Who are these people usually?
Muna: Other foundations or corporate foundations mainly.
Maybe a bit more information on data reporting and impact measurement for Stars itself? Do you have a systemic way of collecting your data?
Muna: It depends on what you consider data. We assess organizations on how they collect data, so part of our assessment process looks at their monitoring and evaluation systems. We look at how they quantify the number of children they work with. Our interest is ‘what has the award achieved for the NGO? What have they been able to go out and do because of it? What is their reach as an organization; how many children are they working with currently?’
So their reach becomes your reach?
Muna: It does, but we don’t ‘claim it’ as our own. Our goal is to reach 10 million people through the NGOs we award. To date we have awarded 127 organizations working with nearly 5 million people in 53 countries. We can’t really say that we have impacted the lives of those people directly through our work, but we are impacting the organizations that are serving them.
If you were to measure your impact, then would it be the impact you have on the organizations you help?
Muna: Yes, it would be. We collect information about where they have spent their funding and what has been achieved. In some cases, there are direct metrics around children that relate to programmatic work that has been funded through the award. However, there is also additional information on what the award has meant for the organization as a whole. Has it allowed them to secure additional funding? Has the profile aspect introduced them to new partners? Those are the sort of things we look at.
The ability for organizations to show that they have received international recognition gives them a big boost. There are things that I believe are really important that we don’t quantify as much. For example, our winners say that team morale and a feeling of pride in the organization increases after the award. The really emotional moment of showing the trophy off to staff and beneficiaries is motivating in itself for the team. The other thing that we pick out is the creative ways in which the funding is used. This is the piece that I find the most interesting because you have organizations that have now set up reserve funds, which was impossible for them to do before. For example, their donors now have to contribute 5% to their reserves for each project that is funded, which they would never have been able to start had they not created an initial reserve fund with our award funding. This means that when donor funding is delayed, which happens quite frequently, organizations can keep paying staff and running their projects by drawing upon the reserves. The pot is then replenished when the funding is received. Things that are creative and helpful for the organization are what we would classify as impact. The things that allow them to continue doing their best work as efficiently as possible. That’s our impact.