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By Jim Coggins
 IT IS too early to tell how the global financial crisis will affect the work of Canadian relief and development agencies, say agency representatives. They are facing the challenge of increasing needs, increasing costs and uncertain donation income. But so far, most agencies say the challenge has not yet reached the crisis stage.
Domestically, the needs have begun to increase, but no one knows how bad things will get. Barbara Walkden, director of development for Yonge Street Mission in Toronto, said the agency has seen "a steady increase" in need over the past year but has not yet seen a dramatic increase due to the more recent credit crisis.
Walkden noted there hasn't been a huge increase in homelessness or unemployment, for instance. However, many of the people the mission serves are those working part-time in low-paying jobs. Their work hours have been reduced, and prices have gone up, resulting in a disproportionate increase in their need for food help.
Many people also can no longer afford a host of non-food necessities -- from walking canes and non-prescription drugs to diapers and Depends.
Bill Mollard, director of the Union Gospel Mission (UGM) in Vancouver, said the greatest increase in need is among the 6% of people who are "at risk of homelessness."
Because of increasing costs, these people are having to choose between electricity or food, between keeping a roof over their heads or eating. In these cases, a few loaves of bread or a few meals from UGM can make the difference in enabling them to hold on. The mission has seen about a 25% increase in the number of meals it serves, said Mollard.
At the same time, the cost of providing ministry has increased. Mollard noted that the cost of flour has doubled and the cost of rice has increased 30%. As a result, it costs UGM about $3.29 to provide one meal for one person, compared to $2.59 just a few years ago.
While increasing commodity prices have created problems in Canada, they have had an even more devastating impact around the world.
Large increases in the price of food and oil -- the latter of which is used to transport food and other necessities -- created what was called a "global food crisis" earlier this year.
Dave Toycen, president of World Vision Canada, said the average Canadian spends about 10% of income on food, while many of the poorest people in the world spend 75%. When food prices double, these people don't eat. As a result, the World Food Program (WFP) estimates that the number of people going to bed hungry has increased from 800 million to over 900 million.
At the same time, the increasing commodity prices have dramatically increased the costs of relief agencies. In April 2008, the WFP asked governments for an additional $755 million just to maintain the same level of food aid. Heather Plett, director of resources and communication for the Canadian Foodgrains Bank (CFGB), noted that the cost to feed a family of five in Ethiopia has increased from $35 to $65 in just a few years.
Ironically, the credit crisis of the last few weeks has helped drive commodity prices back down, and this has helped the situation in some places and the ability of some agencies to provide aid. However, aid agencies said the recent drop in commodity prices has not been as great as the earlier rise, and prices are expected to remain high in the future.
Jeff Adams, director of communications and creative services for Samaritan's Purse Canada and the Billy Graham Evangelistic Association Canada, said that while the situation has not gotten worse in recent weeks, it is "still a disaster." There are people still in need of food, shelter, education and development.
For people with no food or shelter, such as victims of the recent cyclone in Bangladesh, the situation could hardly get any worse, said Plett. But that is little consolation.
To illustrate the reality of the global problem, Toycen noted that 5 million children die of hunger-related causes every year and 200 million children under five are physically and mentally stunted, leaving them with "severely impaired futures."
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The drop in commodity prices is not all good news for places such as Africa, which export especially non-food commodities, said Bruce Guenther, disaster relief coordinator for Mennonite Central Committee Canada (MCC). Wildly fluctuating prices also make it very difficult for agriculture and other industries in third world countries.
The recent rise in the US dollar, or fall in the Canadian dollar, creates further problems for agencies such as MCC which raise money in Canadian dollars and do overseas ministry in US dollars.
The bottom line is that while the current crisis hasn't created a crisis in the third world, the crisis that already existed is still there and may be increased. "It's a question of magnitude, how many millions of people are going hungry," said Guenther.
"Common sense tells us that if there is less money in the system, the poor will be hit the hardest," said Toycen.
Several agencies have contrasted the urgency with which governments have attacked the current credit crisis with the way they responded to the global food crisis. Guenther said he heard that, according to one estimate, the $700 billion the US government has directed to the credit crisis this fall is equivalent to the amount needed from all governments to meet the Millennium Development Goals over 15 years.
One thing that is clear, said Guenther, is that whatever money governments have spent on the financial bailouts is money that won't be available for foreign aid. One of the most negative effects of the current crisis is that it has "diverted attention away from the global food crisis," he added.
Aid agencies have worked hard to raise the concerns during the recent election and will continue to lobby government, said Toycen.
He said he is "hopeful" the Canadian government will maintain its relief and development funding, but all the agencies recognize the tendency of governments in tough times to cut back on relief and development funding abroad and social service funding at home.
That is one of the reasons the board of Yonge Street Mission will allow the agency to receive only a small percentage of its budget from government, said Waldken. "We don't want to be dependent."
In contrast, none of the agencies has experienced a significant drop in donations from private donors, at least so far. Several mentioned that donations of stock and/or donations by big donors dependent on investments have dropped significantly, but donations in general have not.
While donations have not yet dropped, Toycen said his agency is taking a cautious approach because the crisis has come in the months leading up to Christmas, the "most generous time of the year" and the time many charities receive the bulk of their donations.
World Vision is trying to control costs rather than reduce ministry. Toycen suggested that people who have made commitments, such as those who sponsor World Vision children, tend to keep those commitments, even if they are finding it harder to give extra.
In tough economic times, charitable giving may slow down or plateau, but it doesn't usually decline, suggested Mollard. When government and social service agencies are finally starting to make progress toward reducing homelessness, "now is not the time to pull back."
Canadian experience over the past 50 years teaches that economic problems have sometimes made people "more sensitive to the poor" and "encouraged people to be more generous," said Toycen.
Waldken said that has been her experience in 30 years of raising money for Christian organizations. "There is something in the Christian spirit that rises to the occasion."
Agency representatives said they hope this is what will happen in the current crisis.
Related stories:
As markets fall, so too does interest in food crisis
Six months ago the phones at the office of the Canadian Foodgrains Bank in Winnipeg were ringing off the hook with offers to help and inquiries about the world food shortage. On Thursday, World Food Day, the phones were largely silent. "You're the first," spokeswoman Heather Plett said when asked if the church-affiliated organization had received any calls about World Food Day. "We're trying to promote it but it hasn't gotten out to everybody, I guess."
Globe and Mail, October 16
October 23/2007
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