Aid Groups Make Cutbacks, Brace for Greater Challenges Ahead

December 29, 2009, Philanthropy News Digest — Hit by the global recession and falling donations, international aid agencies have been forced to scale back operations during 2009 and are facing the possibility of having to take more extreme measures in 2010, Reuters AlertNet reports.

Although some areas of charitable giving are rising — such as donations in Britain made through payroll deductions — giving overall has been down. Indeed, a recent Bridgespan Group survey found that 80 percent of charities reported funding cuts, up from 52 percent a year ago, while 44 percent said their current situation was worse than six months ago. But it is the combination of less giving with other aspects of the economic crisis — exchange rate pressures, erratic inflation levels overseas, and reduced income from interest on reserves — that is causing charities so much difficulty. For instance, UK groups that already are seeing fewer donations have also been hit by a weak pound; since their overseas work is largely priced in U.S. dollars, their money buys less than it used to.