Nepali Times
Downsizing development

The world's biggest development and humanitarian groups are laying off staff or revising programs for 2009 as their income streams flatten because of the global financial crisis.

Fundraising experts of three of the world's top charities-Oxfam GB, Save the Children UK and World Vision USA-said their programs will be scaled back next year.

"The growth we had assumed when putting plans together a year ago is not materialising," said John Shaw of Oxfam GB. Oxfam had envisaged five to six per cent growth over 2009-10, but has now revised this to zero.

Some of the biggest reductions are coming from corporate donors in the financial sector. "Growth from corporations won't be as much so we won't be scaling up our programs as we'd want to do," said Robert Zachritz of World Vision in Washington, DC. The three agencies have an annual income of $1.8 billion.

Aid groups say they are doing all they can to prevent the cuts from affecting beneficiaries. "We are trying to cut back on support, rather than program costs," Oxfam's Shaw said, estimating cutbacks of up to 15 per cent of staff at headquarters and regional centres to create more cost-effective operations.

While all agreed new money could be found should a crisis break out in the upcoming months, some worry that neglected, chronic crises, such as that in southern Sudan, may suffer. World Vision fears that recipients of microcredit programs, such as poor farmers who receive loans to buy tools, seeds and fertilisers, could be particularly hard hit. World Vision is the world's biggest international humanitarian charity, with $2.4 billion in annual funds across all its branches.

About 30 per cent of World Vision USA's funding comes from the US government, 30 per cent from foundations, and 40 per cent from individual supporters and corporations.

Agencies are trying to innovate their way out of the financial squeeze. Some like Oxfam aim to increase funding from institutional donors which they see as being steadier in the long term. Save the Children is trying to carve out more funds from wealthy individuals.

While corporate funding is dropping off, lay-offs provide an opportunity for redundant staff from the corporate sector to volunteer for charities, putting their skills to good use. Many humanitarian and development NGOs are revising their fundraising plans.

There are some encouraging signs amid the uncertainty. Major institutional donors such as USAID and Britain's DFID are taking a long-term view and not pulling back.

US government funding is going to stay at the same level as 2008 according to World Vision's Zachritz, partly because the funding cycle runs from October 2008 to the end of September 2009, and it being an election year, Congress has passed a continuing resolution keeping US government funding steady.

But it is too early to say if this strategy will endure. According to Shaw: "At the end of the day, government funding is down to governments balancing their books, and politics comes into it so it is too early to tell, but the commitments made so far are encouraging."

Zachritz said World Vision is largely protected from corporate cuts because the bulk of the NGO's corporate donations are 'gifts-in-kind', in other words, medicine, building supplies and clothing, rather than money.

But while financial experts have not yet seen substantial reductions in individual giving, they anticipate potential dips as they approach the holiday fundraising season.


(11 JAN 2013 - 17 JAN 2013)