NGO fighting for survival amid Australia's foreign aid budget cuts

A member of the Australian Agency for International Development looks at a damaged building. A small NGO that provides psychological support to aid workers is feeling the pinch of the country's foreign aid spending cuts. Photo by: Australian Civil-Military Center / CC BY

The pinch of Australia’s foreign aid spending cuts is already being felt by implementing partners — one of which is in serious danger of closing shop permanently.

The Mandala Foundation, a small NGO that provides psychological support to aid workers who have suffered mental traumas after being dispatched to hotspots around the world, was recently informed that the government is no longer continuing its funding. AusAID contributes 75 percent of the budget and the organization will terminate all its operations and stop paying its staff within two months if no new donors can fill the gap.

“A this point, it definitely looks like its going to happen. We have not heard any positive response back from the government that they will be willing to continue supporting us as they have in the past,” Mandala Foundation executive director Christoph Hensch told Devex.

The Melbourne-based NGO had been receiving AU$500,000 a year, but the Australian government is diverting part of the foreign aid budget to relocate asylum seekers to Papua New Guinea, a move initiated by former Prime Minister Julia Gillard and endorsed by her successor, the incumbent Kevin Rudd. AusAID, and the government general, are also now in so-called ”caretaker mode” — unable to make decisions without consulting the opposition — until the national elections in September.


The case of the Mandala Foundation is particularly interesting, among other reasons, because less than a year ago they were actually encouraged by AusAID to increase their funding appeals in the future, according to Hensch.

“[The government told us to] ask for more money to expand our operations, [in which they had] already invested AU$3 million over the past 6-7 years, with the understanding that they were quite supportive of our activities in the light of the toll and heavy emotional trauma that is experienced by aid workers,” he said. “There was never a question [over] whether they wanted to support [us].”

But just three months ago, explained Hensch, the organization was told they would not be receiving any more funds, a decision that shocked the foundation, whose chief executive cannot explain why now “there seems to be a different tune.”

Many AusAID implementing partners are now trying to diversify their funding base, but the Mandala Foundation is the only one that could disappear due to the foreign aid budget cuts.

“I understand that we’re not the only organization that is being reduced in funding, except in our case we are going to lose all the funding, which is not the case for others,” said Hensch.

Contingency planning

So what can the Mandala Foundation do to avoid closing down for good?

At this stage, Hensch refused to discuss specific details on contingency planning, but mentioned they are not ruling out any source of public and private funding, or even more drastic measures: “If we cannot reinstate this funding in one way or another, [we may even have to] transition to a different business model.”

Right now they thinking about all their options to continue operations, and if they can survive with only partial programs or reorganising their structure.

“Obviously there is contingency planning,” he said, but a final decision is yet to be made.

What is clear is that if no new money is found, it will be the end of the Mandala Foundation, established in 2006 and managed since 2012 by Hensch, a former Red Cross aid worker who in 1996 survived an attack against humanitarians in Chechnya in which six of his colleagues died. He himself needed therapy to recover from the deep emotional scars of the tragedy. 

“If we are not able to find a solution, within one or two months we will have to stop all operations and put the organization into an inactive state,” said Hensch.

‘Sad day’ for aid workers

The decision to cut funding for the Mandala Foundation was met with deep regret by the aid community in Australia.

Marc Purcell, executive director of the Australian Council for International Development, said: “It’s a bad day for the health and well-being of aid and development workers when the only specialist services for their needs go under due to a lack of resourcing.”

“Whoever is the new government after the election … needs to urgently review this decision which is shortsighted,” he told Devex.

“Aid workers do an incredibly important job in some of the toughest conditions on Earth … and it is sad to see that the government [will] cut funding to an organization which gives humanitarians much-needed support,” added Purcell.

AusAID declined to comment, arguing that the agency is in “caretaker mode.”

So is this the bleak future that lies ahead for smaller NGOs dependent on Australian foreign aid budget funds? 

“It is unclear at present what other [other] programs and organizations will lose [more] expected funding based on the government’s successive decisions to delay the target date or change the trajectory for reaching the promised 0.5 percent of GNI to overseas aid,” said ACFID. “Experience shows, however, that other programs and organizations will most definitely suffer due to the latest round of cuts.”

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About the author

  • Carlos Santamaria

    Carlos is a former associate editor for breaking news in Devex's Manila-based news team. He joined Devex after a decade working for international wire services Reuters, AP, Xinhua, EFE ,and Philippine social news network Rappler in Madrid, Beijing, Manila, New York, and Bangkok. During that time, he also covered natural disasters on the ground in Myanmar and Japan.