The fallout from the deepening global financial crisis has dealt a blow to nonprofit groups and charities that depend heavily on the kindness of strangers prepared to part with hard-earned cash.
Many charities are already feeling the pinch and reporting less money coming in. They acknowledge it is only to be expected that donors will cut back on giving during economic downturns.
In fact, at the moment, there is more money in the coffers than usual, but only because of this year's natural disasters, and the aggregate figures don't reflect the tail-off in donations over last few months.
As the economic downturn begins to bite, companies everywhere are cutting budgets and among the items most likely to be trimmed are donations. Charities and nonprofit agencies are also seeing a decline in individual contributions.
Reuters recently reported a survey by the UK Charities Aid Foundation and the Association of Chief Executives of the Voluntary Sector showing nearly a third of British charities axed jobs between Sept. 2007 and Sept. 2008, and slightly more than half limited staff pay increases.
But for Oxfam Hong Kong, a well-known charity that weathered the Asian Financial Crisis of 1997 and the SARS crisis of 2003, the effect has so far not been too serious.
The organization depends on roughly 107,000 ordinary Hong Kong people who each donate HK$80 per month.
"This type of donation is more reliable and regular than companies and dignitaries," Liao Hongtao, Oxfam China Unit director, said in an e-mail message. "People think that during crises, charities necessarily receive fewer donations. But the truth is that in 1997 and 2003, donations to Oxfam were higher than usual."
"So far the crisis has had limited impact on us, but we cannot afford to play down its potential effects. We are pruning our day-to-day operating expenses as a response," he added.
The conundrum for charities is that as more and more people caught in the crisis become recipients, donors are more inclined to tighten their wallets until the financial situation gets better. With their cash squeezed, charities are having to pay more attention to spending their money effectively.
There are no clear data available about the numbers of people in China affected by the crisis, but news from the job market is bad, with more and more people laid off or on short-time working.
According to official estimates, no less than 6 million migrant workers across China lost their jobs due to factories closures this year.
During the hard times ahead, charities will be called on to play a bigger role in helping people in need. Some are already adjusting their programs to cater to the rising needs of people facing unemployment or falls in income.
(China.org.cn by He Shan, December 23, 2008)
