There were two big bits of news last week: First that the International Rescue Committee would be cutting more than 10% of staff at its London office, and then that Save the Children International was also preparing for mass layoffs.
As my colleague Dave was quick to point out, the two stories share remarkable similarities: Two rapidly growing megacharities with incomes well over $1 billion, which expanded quickly after a rise in humanitarian spending driven by the COVID-19 pandemic and war in Ukraine, and which found themselves struggling to reverse direction when spending reduced last year.
In both cases, the problems seem to center not on the total amount of money available, but on the lack of unrestricted funding — money that isn’t earmarked for a particular project. Rapid growth is notorious for putting pressure on this scarce resource.