Charities brace for economic slowdown

DAVOS, Switzerland – Six-figure charity donations from Wall Street warriors dried up with corporate year-end bonuses this year. The children’s charity World Vision made up for the difference by calling its donor list one by one.

That worked this time around, but as the global economic downturn widens, non-governmental organisations are being forced to make hard decisions and redouble fundraising to ensure the world’s neediest people do not become the crisis’ forgotten victims.
World leaders including UN Secretary-General Ban Ki-moon, British Prime Minister Gordon Brown, German Chancellor Angela Merkel and former US President Bill Clinton launched passionate appeals at last week’s World Economic Forum not to let the economic crisis become an excuse to turn away from the world’s poorest.
‘There are people who are not starving,’ Clinton reminded participants at the elite gathering. ‘Those who can do more, should.’
Non-profit organisations are lowering their 2009 revenue forecasts – though they still don’t have a reliable idea of how hard donations will be hit. Fearing the worse may be to come, many ran fundraising drives in December – and are seeking advice from the business world on how to inject a bit of business sense – and not just compassion – into their operations.
In recent years, the Davos forum has become a hub for charities, business and governments to swap ideas on how to tackle the issues of poverty – creating what former British Prime Minister Tony Blair last week called an alliance of the ‘business brain’ with ‘social forces’ to produce the best results.
The non-profit world has always had a strong obsession with overhead to get as many dollars to the field. Simply cutting costs does not necessarily bring the best results, said Gib Bulloch of Accenture, which does management consulting for non-governmental organisations.
World Vision saw the crisis coming when it set its fiscal targets at the end of October, said Chief Executive Dean Hirsh. The charity froze salaries for its 35 000 employees worldwide, put a hold on new hires, reduced travel, cancelled meetings and scaled back its 2009 revenue growth target from eight percent to flat or three percent.
Checks from Wall Street’s fat cats did not show at the end of the year as usual. Hirsh also worried about losing the 1,5 million Americans who make monthly contributions of US$30 to US$50 a month to sponsor a child, so World Vision started making calls and offering sabbaticals to donors who felt they could not continue making payments now.
The thinking was it would be easier to keep the donors on the books, than recruit new ones later.
– Nampa-AP