Tuesday, April 22, 2008

Charities Operating Abroad Struggle With Rising Food and Oil Costs, and the Declining U.S. Dollar

Today, April 22, the Chronicle of Philanthropy reports that charities operating abroad are suffering from rising food and oil costs, as well as the falling U.S. dollar.  One person posting a comment to the article on the Chronicle's website suggested that the article understated the severity of the problem because the declining U.S. dollar abroad is adversely affecting the quality of life of workers paid in U.S. dollars, making it much harder for such persons to maintain a decent quality of life, and in turn, leading to difficulty in hiring and retaining qualified persons to work overseas.  See excerpt below for more of the story:

Charities that work overseas have been battered by a spate of recent economic troubles, including rising food and oil prices and the weakening dollar. Nonprofit leaders say they are being pressed to meet growing needs, even as the costs of doing work are ballooning.

Some have even been forced to scale back services. The American Jewish Joint Distribution Committee, in New York, dropped 25,000 people from a food and medical-assistance program in the former Soviet Union after expenses jumped by 20 percent.

“We’ve lost $4-million in buying power,” said Steve Schwager, the group’s chief executive officer. “We’ve had to cut off the least needy to ensure the most needy can still get food.”

Mr. Schwager said he may have to consider laying off staff members if the squeeze continues.

Charities that specialize in fighting hunger and poverty are worried that the high price of food could undercut their work. In the past few weeks, food riots have broken out in countries such as Egypt and Haiti.

“It’s a major concern for us,” said Nan Dale, executive director of Action Against Hunger, in New York, which combats malnutrition. “We’d like to put ourselves out of business, to be no longer needed, and this could make it much worse.”

. . .

Action Against Hunger, the Pan American Development Foundation, and many other charities are trying to raise awareness about the need for long-term solutions, such as increased spending on agriculture. The eight wealthiest nations plan to add the topic to their agenda when they gather this summer for the G-8 summit, a move promoted by the ONE Campaign and other organizations.

Declining Dollar

High fuel prices and the weak dollar are also making it more expensive for groups to deliver assistance abroad.

. . .

Meanwhile, charities are searching for ways to alleviate their financial woes.

Thomas Tighe, president of Direct Relief International, said his group has created a hub in South Africa to store and distribute supplies from so that it doesn’t have to ship as many medical supplies overseas. The charity has also consolidated how it packages its supplies, in an attempt to reduce shipping costs.

See Article for the full story.

AMT

http://lawprofessors.typepad.com/nonprofit/2008/04/charities-opera.html

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