Downturn to Cost Billions in Aid to World's Poor
LONDON, Feb. 26, 2009, Reuters — The cost to aid budgets of the world economic downturn is headed for billions of dollars, slashing assistance to the world's poorest people just as it becomes harder for them to make money for themselves.
In the United States, the heads of more than 50 groups in the InterAction coalition, whose 175 members manage a total of $9 billion annually, say they expect donations from individuals, businesses and foundations to fall by about $1 billion this year.
"If this (recession) goes into 2010, we will be seeing a significant reduction in delivery of programmes in the world's poorest areas," InterAction president Sam Worthington told Reuters, adding weaker organisations may fall by the wayside.
British-based charities are suffering additionally from the pound's decline, making their money worth less abroad.
The squeeze has come as the needs of many crisis-hit communities, such as those in Zimbabwe, Sri Lanka and Sudan's war-torn Darfur region, are rising.
"The problems in Darfur haven't changed one iota because of Western bank failures. If anything, it's just gone off the agenda," said John Low, chief executive of the Charities Aid Foundation (CAF), which helps charities manage money.
A CAF survey in January of 322 British charities — including groups working on overseas aid — found half expected their income to fall in the next year and 41 percent had seen their income drop in the previous three months.
Groups in Africa, which receive much of their funding from international charities and government donors, are worried about the effect on their work.
They include Uganda's National Guidance and Empowerment Network of People Living with HIV/AIDS.
"With HIV, the major effect of the global financial problems is fear: fear that there might be less funds committed to the campaign and fear that there might be a shortage of essentials like drugs and condoms," said director Major Rubaramira Ruranga.