WUNRN
NGOs - Non-Governmental
Organizations
|
NGOs have raised funds in recent years through selling
‘alternative gifts’ such as goats for communities through their catalogues |
DAKAR, 27 October 2008 (IRIN) - Some of the biggest
development and humanitarian NGOs are laying off staff or revising programmes
for 2009 as their income streams flatten because of the global financial
crisis.
Fundraising experts of three of the world’s top
NGOs – Oxfam GB, Save the Children UK and World Vision USA – said
programme growth will slow in 2009 as a result of the squeeze.
“The growth we had assumed when putting plans together a
year ago is not materialising,” John Shaw, director of finance and information
systems at Oxfam GB, told IRIN. “The overall picture is essentially flat.”
Oxfam had envisaged five to six percent 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, NGO staff told IRIN. “The fall-off with
corporate started six to nine months ago,” said Tanya Steele, supporter
relations and fundraising director for Save the Children in London.
“The financial services and investment banking sector
have been very generous in the past but we know it will be a tough financial
year for them going into 2009. We’d expect [funding from them] to be flat or
potentially decline going into 2009.”
“Growth from corporations won’t be as much so we won’t
be scaling up our programmes as we’d want to do,” Robert Zachritz, World
Vision’s director of advocacy and government relations, told IRIN from
Washington, DC.
As a result, NGOs such as Save the Children will not be
able to make substantial investments in existing or new programmes as they had
hoped.
The three agencies have an annual income of US$3.1
billion.
Impact
Aid groups are doing all they can to prevent the cuts
from affecting beneficiaries. “We are trying to cut back on support, rather
than programme costs,” Oxfam’s Shaw said, estimating cutbacks of 10 to 15
percent of ‘variable costs’ including 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 upcoming months, Save the Chilidren’s Steele worries some
of the more neglected, chronic crises, such as in southern Sudan, may suffer.
World Vision fears that recipients of micro-credit programmes,
such as poor farmers who receive loans to buy tools, seeds and fertilisers,
could be particularly hard hit. “Much of this relies on getting loans from
banks, which is going to be a real challenge in the near future,” Zachritz
pointed out. “Losing this credit is a huge problem for the world’s poor,
small-scale farmers.”
World Vision is the world’s biggest international
humanitarian non-profit, with US$2.4 billion in annual funds, 30 percent of
which comes from the US government, 30 percent from foundations, and 40 percent
from individual supporters and corporations.
NGO strategies
NGOs are trying to innovate their way out of the
financial squeeze. Some agencies, such as 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. “It will be a competitive market but I cannot believe we
won’t grow in the next four to six years,” said Steele.
While corporate funding is dropping off, lay-offs
provide an opportunity for redundant staff from the corporate sector to
volunteer for non-profits, putting their skills to good use, said Steele.
“While corporate money is diminishing, that does not mean the relationship with
these companies has to come to an end.”
And Steele hopes that drops in television advertising
costs – one effect of the world credit crunch – will mean agencies such as Save
the Children can now better afford to run direct marketing campaigns on
television.
But on the whole, many humanitarian and development NGOs
are revising down their fundraising plans. Aid agencies are less likely to be
knocked down if they plan ahead, said Oxfam’s Shaw. “We have been revising our
plans over the past six months. If we have to take knee-jerk decisions these
won’t be as effective as they will be if we plan for the future.”
Silver lining
There are some encouraging signs amid the uncertainty.
Major institutional donors such as the UK Department for International
Development or the US Agency for International Development “are taking a
long-term view and we are not seeing any immediate signals that they are
pulling back,” Steele affirmed.
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 come 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. Further, World Vision relies on child sponsorship for much
of their individual giving. “People are very loyal to that and you usually
don’t see it drop, even when families experience [financial] difficulties,” he
pointed out.
It is this loyalty that will keep them going, NGO staff told
IRIN. "The public is still very responsive to international [humanitarian]
needs,” Shaw said.
But while the NGO financial experts have not yet seen
substantial reductions in individual giving, they anticipate potential dips as
they approach the holiday fundraising season. “Our Christmas catalogues have
already gone out…this holiday will be a real litmus test in terms of tightening
belts,” said Steele.
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