Circling the Drain: Aid Agencies Slash Budgets

As Mr. Donne once said, the bell tolls for thee - and, at the moment, it's tolling rather loudly for aid agencies.  The global financial crisis has had a brutal impact on aid agencies, eviscerating budgets and forcing drastic action.

For instance, CARE USA is reducing pay for all US staff - everyone is losing the equivalent of one week's salary, with the reductions spread over the balance of the year.  (To compensate, the organization is providing additional paid days-off this year and next.)

From what I've heard, the International Rescue Committee (IRC) has instituted a hiring freeze at headquarters, and told staff there will be no annual salary increase, at least for now.

Similarly, Save the Children US has also instituted a hiring freeze and deferred salary increases, as well as cut travel.

(If anyone has additional information about cuts at other agencies, would love to know - feel free to email me at change.humanitarian.relief@gmail.com.)

A Reuters article from February puts these actions in perspective:

- In the US, more than 50 aid organizations have estimated that they expect donations to fall by almost $1 billion this year.

- A survey of 322 British charities found that half expected their income to fall in the coming year, while 41% had already seen their income decline over the last three months.

Donors themselves are not immune.  For instance, Ireland has slashed its 2009 aid budget by 20%, while Italy has cut its aid budget in half.

In slightly more positive news, the European Commission has announced that it will "frontload" aid to developing countries - more information after the jump:

According to a statement released yesterday by the European Commission:

"The Commission is frontloading €3 billion, or 72% of its foreseen budget support to African, Pacific and Caribbean nations thereby ensuring that social spending is not forsaken when most needed. An ad hoc "FLEX" instrument will act counter-cyclically to compensate those developing countries worst hit by falling export revenues as world trade contracts. It will be on stream before the end of 2009, directing at least €500 million to allow developing countries to continue social safety net spending. This is in addition to the €1 billion "food facility" adopted prior to the G20, €800 million of which will be made available this year. Overall, frontloading by the European Commission should bring forward €4.3 billion resources to 2009."

[Photo from narcist11.wordpress.com]