DEVELOPMENT: Grassroots Aid Groups Struggle to Stay Afloat

By IPS Correspondents Reprint | | Print |

Daniel Stahl

UNITED NATIONS, Feb 20 2010 (IPS) - The Holy Child Integrated Agricultural Centre, an organic farm near Abeokuta in southwestern Nigeria, was looking forward to having running water. An industrial borehole had already been already installed, and a pump and piping to various buildings were in place.

But water still remains scarce.

A generator and electric wiring are missing to complete the project, which is operated by the sisters of the Society of the Holy Child Jesus (SHCJ) to create a sustainable living environment, job opportunities, nutritious food and training for self-sufficiency in the area.

The reason for the uncompleted project is simple: the Nigerian farm lacks sufficient funding.

The programme has recently seen a more than 50-percent reduction in donations, said Catherine Ferguson, a coordinator for UNANIMA International, an NGO committed to economic and social development.

She was speaking at the presentation earlier this week of a study titled “The Global Economic Crisis and its Impact on Civil Society Organisations”. The 48-page paper examines the effects that the food, environmental and economic crises are having on civil society organisations (CSOs) and their work.

The crises have made it harder for CSOs around the world to secure operating funds. Some 153 of 640 CSOs submitting questionnaires reported budget decreases in 2008, while 214 had less money in 2009.

Some organisations reported an increase in their income. But those numbers are declining – while 146 of the 640 CSOs were able to expand their budgets in 2008, only 111 did so in 2009.

And many organisations that participated in the questionnaire also predict that the rock bottom hasn’t been hit.

A supervisor of the Nigerian organic farm project “believes she hasn’t seen the worst yet because the decreases are based on investment returns from the previous year,” Ferguson told IPS.

For 2010, 160 of the study’s participants expect to see less funding. “And the data, too, says the [worst] impact is still to come,” according to Eva-Maria Hanfstaengl, the author of the study.

Just as the organic farm in Nigeria had to cut back on its expansion plans, a lot of other CSOs also had to adjust their plans to dwindling incomes.

The biggest reduction is in the area of private donors, who were also hit by the economic crisis.

But the participating CSOs also saw less money coming in from private foundations, international institutions, corporations and governments.

One affected CSO committed to helping people affected with HIV/AIDS in Cambodia runs three projects with about a one-million-dollar operating budget.

“This project has been receiving funding from U.S. government sources for five years and were recently informed that after these five years they should look for other sources of revenue but no reasons were given,” Ferguson said.

At the same time, another one of the project’s major donors reduced his funding by 40 percent.

The Cambodian project has committed to follow through with therapy for about 750 children living with AIDS, who are already in the project, until they are young adults. But new applicants will have to be turned away or referred to another programmes.

“The programme may even close,” Ferguson said.

The financial problems are coming as CSOs face growing demand for services. According to the “Global Monitoring Report 2009” of the World Bank and International Monetary Fund, 55 million more people in developing countries will live on less than 1.25 dollars a day than expected before the economic crisis hit.

Many of the CSOs would like to ramp up their programmes, but too often, the available funding isn’t even enough to finance existing projects. Many CSOs first try to cut back on administrative costs, reduce travel budgets and other expenses, rather than cutting into the core aid programmes.

On the organic farm in Nigeria, some sisters are even eating less food so they can keep up the project, Ferguson reported.

More than half of organisations in Latin America and Asia had to “narrow their scope of work and reduce their number of staff”, says the study.

In African countries, 72 percent of respondents reported that they have downsized their operations.

As one answer to the declining inflow of funds, 80 percent of the organisations have developed better collaborative networks. Seventy-eight percent also started additional fundraising campaigns, according to the study.

“Nevertheless, most of them do not expect their strategies to be sufficient to meet the challenges,” Hanfstaengl said.

Many projects could be run more efficiently, she added. “But working harder may not do anything, if the source of funding is just not there.”

The study offers a series of recommendations, based on responses received from the CSOs. Eighty percent said fighting corruption would aid their work, and about the same number recommended the introduction of basic income grants for the poorest and most vulnerable.

The survey also identifies the need for “counter-cyclical action” by institutionalising an increase of governmental and international financial aid during crises, as many CSOs cannot stay afloat when funding flows from private donors and corporations dry up during tough times.

Counter-cyclical financial aid would help CSOs by making their funding more stable and predictable.

To pay for such actions, a majority of CSOs favour the idea of governments establishing a financial transaction tax.

The study also says that a “U.N. charter for a sustainable and socially oriented market economy” would be favoured by 73 percent of CSOs.

“The crises demonstrate the urgent need for the establishment of such an overall framework of global governance,” Hanfstaengl said.

Leaders of the G20 economically powerful countries recommended such a charter at their meeting in London in 2009, but haven’t made any progress on defining clear elements of it.

The survey was funded by the United Nations Secretariat.

The steering committee for the survey included members of the U.N.’s Committee for Social Development, the Friedrich Ebert Foundation and the U.N. Non-Governmental Liaison Service.

More than 4,000 questionnaires were sent out, and about 800 answers came back – a very good response, Hanfstaengl notes. “The study hit a nerve,” she said.

In the end, 640 responses, widely distributed among the different regions in the world, were incorporated into the study.

The focus areas of the submitting CSOs include social integration, development, social justice, sustainability, gender, health and financing for development.