Global Policy Forum

Tight Belts, Tough Choices for Charities

Integrated Regional Information Networks
November 13, 2008

Humanitarian organisations face tough choices if the global financial crisis affects their income, as some analysts predict. Although it is too soon to predict the full impact of the crisis on funding, some agencies told IRIN they were reviewing possible cutbacks and some have started tightening their belts. "At Concern Worldwide we are having a very tough conversation. We are going to have to make some difficult choices in 2009," said Tom Arnold, chief executive of the Dublin-based NGO. "If necessary, we will prioritise emergency situations and the needs of the most vulnerable, for example in countries like Chad or Niger, which are already below the radar in terms of funding," he told IRIN. "But we cannot cut back on developmental work either. Development work is about helping to prevent emergencies and disasters in the future. In the end, it is cheaper and more effective. It really is a matter of ensuring we exhaust every effort to keep our income up and to deliver on our commitment to the poor. It's the only logical way we can approach this crisis."

According to Peter Walker, director of the Feinstein International Center at Tufts University, who has studied the complexities of humanitarian and development aid, agencies would be well advised to draw up detailed contingency plans. "It's not just that aid funds will slow down, but local state funding to social welfare programmes and public health will slow down, employment levels will go down etc., so the scale of many disasters will go up because people are more vulnerable to shocks."


Oxfam GB (Great Britain) is planning to cut about 10-15 percent off its variable costs, which include staffing, from the next financial year. "We're trying to streamline our operations in the UK, which includes some redundancies and also not filling some vacancies," spokesman Dan Timms told IRIN. Cost-cutting could also affect "some quite ambitious" direct marketing and advertising plans. "When you compare it to the actual programmes in the field, it's a low priority, so really we're going to be reining in our spending on those kinds of things." Oxfam International media officer Louis Bélanger said cost-cutting might mean stopping lower priority projects. "We don't want to cut a little off everything, but we'll always strive to avoid cutting money going to our programmes," he told IRIN. "We'll continue to look at ways to make the most of every penny. We're looking at innovative ways to raise money. The focus of our organisation will always remain our programmes on the ground and the people we work for."

CARE said contingency planning was already under way. "A reduction to our programmes would be a last resort," public relations director Lurma Rackley told IRIN. "What we would do, however, is slow down expansion and possibly reduce the number of staff through hiring freezes or postponements in programme expansion." The International Rescue Committee (IRC) is cutting back on mailings to recruit new donors. "Responses to some direct mail solicitations in the United States have not been what they were in previous years," vice-president for development, Janet Harris, told IRIN. Others are less specific. "Basically disaster and humanitarian relief and food will always take precedence," a US Agency for International Development (USAID) spokesperson told IRIN. "We will evaluate. We can't tell you. If the situations change the answers will change, it's all situational."

Washington-based Population Services International (PSI), which runs programmes on malaria, reproductive health, child survival and HIV prevention in 60 countries, was equally non-specific. "We always try to be frugal in our annual budgeting process but this year we have been asked to be especially frugal and to limit any unnecessary costs," David J. Olson, international director for public affairs, told IRIN. "We have not had discussions or priority areas although this will inevitably come up during our upcoming budget presentations." The International Federation of Red Cross and Red Crescent Societies (IFRC) said it approached planning from a needs-based perspective. "To the extent that funding is not forthcoming we necessarily have to trim our programme expenditure plans whilst still aiming to maximise programme effectiveness," Stephen Ingles, director of support services, told IRIN.

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