Aid cut as charities feel the pinch

Aid agencies have been hit hard by the global recession with shrinking donations, forcing them to shed jobs and cut down or slow aid work. Less people giving, exchange rate pressures and reduced income from interest on reserves has put the squeeze on aid and experts warn they may need to take more drastic measures in 2010. Relief groups need to brace themselves for tougher times even though the global economy is showing signs of picking up. Despite the economic downturn, 54% of adults in the UK still donate to a charity each month. But the overall value of donations has fallen by £1.3bn, according to research by the Charities Aid Foundation (CAF), which helps link aid organistaions with donors. Donors may have less money to give, maybe because of unemployment and higher interest rates.

In the United States, donations fell by 5.7 per cent, according to a 2008 report - the largest drop since the group began tracking U.S. donations fifty years ago."The decline in donations lags behind the worst of the recession," CAF’s John Low told Reuters news service. "History suggests there might be more pain to come." Research by the Charities Aid Foundation (CAF) reveals that Charitable giving in Britain fell 11 per cent in 2008-9 in inflation-adjusted terms, according to the UK Giving report, compiled by CAF and the National Council for Voluntary Organisations between April last year and March 2009.Mr Low said that giving through payroll in Britain is rising,  and charities whose money comes through child-sponsorship  and faith-based groups are faring better s.

The double effect of less giving  and  other aspects of the economic crisis are causing charities so much pain. A weak pound has hit UK groups, whose overseas work is mostly priced in dollars, therefore their money doesn’t go as far.Cafod, the British charity said it had lost £1million off its reserves because of lower interest rates. "We don't have extra resources to put in so the reality is some programmes have had to be scaled back," said Tom O'Connor, Cafod's director of communities and supporters."If things got worse, if the economy got worse and our income dropped, we'd have to pull out of particular countries."Cafod is making about 12 people redundant in the UK and abroad. Oxfam and World Vision meanwhile have also cut staff. At Christian Aid, there may be as 90 redundancies to help it cope with a £7million deficit for 2010-11.

By Hayley Jarvis for SOS Children