Silence in Canada as International Charities Feel Market Crunch

In June 2008, Voluntary Services Overseas (VSO), a London, UK-based international development charity, issued a media statement urging City employees to “swap their six figure salaries” for voluntary work in the developing world. Citing looming prospects about labour market uncertainty, VSO argued that volunteering in the poorest parts of the world will deliver more than just a meaningful experience and personal reward – it will also enhance professional development and one’s marketability to prospective employers. With several years of economic downturn predicted, the organization has been encouraging the upwardly mobile to take a two year sabbatical overseas and return after market conditions improve.

The Times Online reports today that job market fears and mortgage pressures have combined to produce a perfect storm in which VSO now finds itself scrambling to fill several hundred positions in the next five months. VSO volunteers typically help developing countries to build their education and health systems and the capacity of community organizations in areas such as human rights and income generation. A sign of the volatile times, VSO states that 55 people with backgrounds in teaching, law and management recently withdrew from its recruitment process because they feared they would not be able to find a job after returning from their time abroad.

It’s unclear what impact the global credit crunch will have on international development organizations based in Canada. Throughout the current federal election campaign Prime Minister Harper has been arguing that the economic fundamentals in Canada remain strong, despite indications of a recession in the U.S. and shaky markets overseas. Earlier in the year his finance minister Jim Flaherty stated much of the same in a speech to the Economic Club of Toronto, and he argued that the Conservatives had created “a tremendous stimulus for charitable giving in Canada.”  These rather more positive assessments stand in marked contrast to statements coming out of the business and finance sectors. Perrin Beatty, president of the Canadian Chamber of Commerce, argues that the country’s leading politicians appear to be in denial about the financial crisis. “It’s clear that something profound is happening,” he is quoted as saying in a CBC report, “yet the politicians up to now have wanted to talk about everything else.” Doug Porter, with BMO Capital Markets, is even more dire in his assessment: “At this point, if this kind of volatility keeps up, I think we’re looking at a much more serious downturn than a mild recession that most of us are talking about.”  

Yet what is clear is that despite indications the economy may be veering toward a recession, leaders in Canada’s development and charitable sectors have been silent. VSO Canada, which recently announced a merger with Canadian University Services Overseas (CUSO) to become the largest volunteer-based international cooperation agency in Canada, has been quiet on the matter. CIDA, Canada’s lead government agency for development assistance, has not issued a single statement about the impacts that the slowing economy will have on its capacity to continue delivering aid overseas. And while the Charities Aid Foundation in Britain has been regularly issuing updates on the economic implications of the market meltdown for the voluntary sector, Imagine Canada has been mute by comparison. Not a single report has been published or broadcast on any of Canada’s major news outlets. Even the news page of Charity Village, “Canada’s supersite for the nonprofit sector,” reports nothing about how the global economic slowdown will impact charitable giving. 

The failure of leading development agencies, nonprofit organizations and media organizations in Canada to discuss publicly the impacts that the global market slowdown will have on the voluntary sector is a cause for concern. Individuals who will be feeling the sharpest edges of the economic crisis will be increasingly reliant on charity to survive. The Association of Chief Executive of Voluntary Organisations (ACEVO) in Britain reports that demand in that country for charitable services has increased by 72% in the last year alone, while donations have dropped by almost a third in the same period. Social enterprises are also feeling the pinch. As reported by Charity Finance, a poll of nearly 1,000 social entrepreneurs and small business owners found that nearly four out of ten say they have experienced cashflow difficulties in the past few months. Around 70 per cent of those who had recently applied for a business loan or credit card had been turned down, while over a third had been forced to resort to personal loans and credit cards.

Charity organizations everywhere are already or will very soon be facing difficult choices in the foreseeable future between reducing services or running deficits to maintain existing programs. And when these factors combine with the steady rise in costs of energy, fuel and food, the most vulnerable citizens – whether they are in Zambia, Liverpool, Buenos Aires or Toronto – will be hardest hit. 

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