How will aid budget cuts affect Australia's top 50 NGOs?

On May 12, Australian nongovernmental organizations will be anxiously reviewing the federal government budget to determine what impact the changes will have on their programs. Early information is that it will not be good — after losing more than 11 billion Australian dollars ($8.7 billion) under the leadership of Tony Abbott, the Australian Council for International Development estimates an additional AU$1 billion will be lost from the foreign aid envelope when the budget is released Tuesday. Three critical funding programs for NGOs are under threat — the Australian NGO Cooperation Program, Australia-African Community Engagement Scheme and Solomon Islands Partnership Agreement, all administered by the Department of Foreign Affairs and Trade. The ANCP alone is predicted to be cut by at least 20 percent, which could see the 49 NGOs receiving funding under the scheme struggle to maintain existing programs through a shared loss of almost AU$27 million. For the top 50 Australian NGOs receiving funding from DFAT, the budget cuts will force them to make tough choices on programs that need to be closed or reduced, affecting the lives and livelihoods of the world’s poorest communities. An analysis by Devex reveals that of the AU$1.2 billion in revenue required by these 50 organizations to implement and manage international aid programs, more than one-quarter is made up of funding from the Australian federal government. Nine organizations, including the Australian Red Cross, Marie Stopes International Australia, WaterAid Australia, UnitingWorld and Anglican Overseas Aid, currently rely on the federal government to contribute more than half of their required income. The programs managed by these NGOs reach more than 100 countries and regions worldwide and support a range of critical humanitarian work, including child welfare, health, education, water and sanitation, economic and political development, protection and emergency response. Of the 50 NGOs, more than three-quarters of the total spend in humanitarian aid is guided by the following 10 organizations. 1. World Vision Australia World Vision Australia received more than AU$42 million from the Australian federal government for the 2013-14 financial year to support foreign aid projects, making up 11 percent of the revenue required to deliver their foreign aid programs. The cuts to foreign aid already made have resulted in 12 projects in 10 countries being closed early and a further 10 projects have been reduced. Further cuts will result in World Vision making more tough decisions about which projects will proceed and which will not. “World Vision and the Australian government work in partnership across our region — helping to provide basic health, education and water services and working with communities to improve safety for children and women,” Tim Costello, CEO of World Vision, told Devex. Costello said its programs have helped reduce cases of diarrhea and pneumonia among children, which are the two biggest causes of child deaths worldwide. 2. Save the Children Australia Save the Children Australia received almost AU$40 million in Australian government funding for the year ending December 2013, making up 38 percent of its required revenue for foreign aid programs. Its programs support and protect children in Africa, Asia, the Middle East and the Pacific through health, education, emergency response and disaster mitigation programs. Further cuts to Australian aid budget might result in a reduction of at least AU$2.5 million in Save the Children’s budget, potentially putting all of its programs and services under review. 3. Australian Red Cross The Australian Red Cross is the third-largest recipient of federal government aid funding, and one of Canberra’s most critical allies in responding to humanitarian disasters. The Red Cross was essential in Australia’s response to recent natural disasters, including Cyclone Pam in Vanuatu and the recent earthquake in Nepal. The Australian Red Cross receives almost AU$36 million from DFAT primarily through humanitarian programs, and cuts could greatly affect its ability to deliver essential services following future natural disasters. 4. Oxfam Australia Almost 23 percent of Oxfam Australia’s AU$80 million income to support foreign aid programs comes from the Australian federal government. Its foreign programs are delivered in 19 countries and regions, including emergency response and disaster risk mitigation, WASH and women’s empowerment. Chief Executive Helen Szoke expects the budget cuts to have an impact on all of Oxfam Australia’s existing programs and the organization’s ability to expand in future. Assuming it loses 20 percent of DFAT funding in one year, the NGO might no longer be able to support at least 200,000 people — mostly women — in 2016, Szoke added. “We are looking at devastating choices, such as whether to continue lifesaving programs that support victims of domestic violence or that provide essential safe water and hygiene to communities,” the chief executive explained. “While we are still waiting to see exactly where the ax will fall, what we know is that the cuts are so large it is unlikely any country or region will be spared.” 5. CARE Australia CARE Australia received more than AU$19 million in Australian government funding for the 2013-14 financial year, making up a third of the revenue they require to deliver foreign aid programs. The NGO supports 25 countries and regions with nine key program areas, including WASH, food and nutrition, and gender equality. Programs in Afghanistan, Cambodia, Ethiopia, Malawi, Papua New Guinea, Tanzania, East Timor, Vietnam and the Palestinian territories will be reduced under budget cuts. 6. Caritas Australia Caritas Australia received AU$14.5 million in Australian government funding for the 2013-14 financial year — 31 percent of its required revenue for foreign aid programs. It currently manages programs in 35 countries, covering areas such as food security, peace building and reconciliation, water and sanitation, health and education. Predicted cuts would reduce its annual income by at least AU$2.5 million, potentially putting all programs under review. 7. Plan Australia Plan Australia received almost AU$13 million in funding from the Australian federal government for the 2013-14 financial year. Providing support to 50 countries, Plan Australia is currently being forced to review programs in nine countries following recent and predicted budget cuts: Bangladesh, Cambodia, Ethiopia, Indonesia, Laos, Myanmar, East Timor, Uganda and Vietnam. CEO Ian Wishart told Devex the cuts were “brutal and unfair” and would have a damaging impact on millions of lives in the developing world. “Federal governments of both stripes have long viewed our overseas aid budget as nothing more than a convenient piggy bank to be raided when a bill needs to be paid,” he said. “But this myopic view overlooks a simple fact: Overseas aid is not a charity to be reviled but a crucial investment to be carefully safeguarded.” 8. The Fred Hollows Foundation The Fred Hollows Foundation works to prevent avoidable blindness in developing countries and since 1992 has restored sight to more than 1 million people. For the year ending December 2013, the Fred Hollows Foundation received AU$10.5 million from the Australian federal government to support its work. But budget cuts have so far seen one program axed in Vietnam’s Mekong Delta, which could have helped 23,000 people and restored sight to 2,300. Further cuts could see an additional 22,200 patients go without treatment, 45 children under 5 being refused critical cataract surgery to prevent blindness and loss of 4,505 support staff through loss of training programs. “For millions of people around the world, Australian aid is the difference between being able to feed a family, having access to clean water, being treated for illness and disease, or getting children a basic education,” CEO Brian Doolan told Devex. “Another round of deep cuts to Australian aid could condemn some of the poorest people to an ongoing vicious cycle of poverty and poor health.” 9. CBM Australia CBM received AU$8.5 million in funding from the Australian federal government for the year ending December 2013, making up more than one-quarter of the income required to improve the lives of people with disabilities in poor communities. “CBM, along with other development organizations, still doesn’t know the extent of ANCP cuts that may occur,” Heath McSolvin, director of communications and fundraising for CBM Australia, explained to Devex. “A 20 percent cut would reduce CBM’s anticipated ANCP funding in 2015-16 by AU$1.5 million and mean our previous hopes of continuing to expand the number of people we can reach may not be realized.” On the ground, McSolvin said the cuts will affect thousands of people living with disability, forcing them to continue living in poverty and being excluded from community life. 10. ChildFund Australia ChildFund Australia received AU$7.9 million in funding from the Australian federal government for the 2013-14 financial year for programs supporting children in 29 countries. These programs focus on maternal and child health services, WASH, child protection and education. Because of the cuts to the aid budget, the NGO has been unable to proceed with new projects in eight countries: Indonesia, Ethiopia, Kenya, Philippines, Sri Lanka, East Timor, Uganda and Zambia. Future expansion of programs in Cambodia, Laos, Myanmar, Papua New Guinea and Vietnam are under threat as well. “The size and scale of these cuts are particularly damaging and affects programs already underway,” CEO Nigel Spence told Devex. “For organizations like ChildFund, this is an incredibly frustrating and ineffective way to be working.” The NGO had already scaled back and delayed programs in Laos, Papua New Guinea and Vietnam to cope with the earlier funding cuts. The move directly affected 17 projects, including an early childhood education project in rural Laos. Spence told Devex further cuts will hurt them hard. “In short, these cuts will dramatically set back our contribution to crucial progress for vulnerable children and families in our region and beyond. This is an extremely poor choice for budget savings — a false economy that will do more harm than good,” ChildFund Australia’s CEO said. The impact on lives Australian NGOs say these cuts will just punish the poor. “Further aid cuts will have an alarming impact on the lives of the world’s most vulnerable and at risk people,” Alistair Gee, executive director of Act for Peace, warned. “Hundreds and thousands of lives will be lost. To think that as a nation we are choosing to balance our books over human life is something we should be ashamed of and continue to protest against.” Matthew Maury, CEO of TEAR Australia, agreed. “We are both disappointed and embarrassed by our government’s decision to attempt balance the budget of our wealthy nation on the back of the poor — it is not just wrong it is morally bankrupt,” he told Devex. TEAR Australia expects a 20 percent reduction in contributions from the Australian government to its budget will negatively affect 34,000 people — 20,000 of them women and children — in South and Southeast Asia. But Paul Nichols, chief executive of WaterAid Australia, warned the cuts could have an adverse impact on Australia as well. “Any cuts to the aid program we believe would significantly undermine Australia’s reputation and credibility in the region, and impact upon future trade and security interests,” he explained to Devex. Amid reduced funding from the federal government, how should Australian NGOs diversify and find new ways of delivering international aid programs? Have your say below. Check out more insights and analysis for global development leaders like you, and sign up as an Executive Member to receive the information you need for your organization to thrive.