Global aid charities are “stuck” and cannot plan for the future because of uncertainty around funding, an event has heard.
Bond, the umbrella body for international development organisations, issued the warning today during an online event.
Mike Wright, director of membership and communication at Bond, which hosted the webinar, said that Bond was meeting with government officials to discuss the issue next week.
He argued that the government and other donors had been “caught by surprise” when inflation rose suddenly earlier this year, but said that institutional funders should now show the same flexibility as they demonstrated during the pandemic.
Wright also presented the findings of a Bond survey which showed how 100 aid charities had been affected financially by the cost-of-living crisis.
The survey showed that “while this year is pretty bad, people are thinking next year might be even worse”, Wright said.
He told the event that charities urgently needed clarity from the Foreign, Commonwealth and Development Office about future funding.
Parliament’s development committee has warned that government aid spending could fall again in the next round of spending cuts.
Confusion around FCDO funding was “very challenging” for the sector, Wright said.
Funders including the government removed some restrictions on grants to help charities cope with Covid-19 and Bond suggested they may consider doing so again in response to the cost-of-living crisis.
But Wright said that, according to the results of Bond’s survey: “There has not been a great deal of flexibility from donors to accommodate increased cost. Where there has been some flexibility, it has been about the adjustment of outputs and programme deliverables.”
Inflation stands at more than 10 per cent, a 40-year high.
Wright said: “As with the sector as a whole, it [inflation] has caught them [donors] by surprise.
“But we are seven or eight months into this, so it should no longer be a surprise.”
He also argued that charities could not plan effectively when the value of future funding was so unstable.
Wright told the event: “It is almost like organisations are stuck and they cannot plan.
“How do you invest in change when your organisation is constantly challenged? That is a real issue for organisations.”
He added later: “The problem at the moment within the sector as a whole is that, because of the FCDO lead, there is very little certainty around, and that is what we could do with more of.”